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Updated with information about Thomas Ryan.



) -- One of the people choosing

Bank of America's

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new CEO seems to have garnered a generous options package for himself when he led another bank.

D. Paul Jones, Jr., the former head of Compass Bancshares, was chosen to replenish Bank of America's depleted board back in June, at the behest of regulators. He served as an executive at the Birmingham Ala.-based regional bank from 1978 until 2007, when it was acquired by the Spanish bank Banco Bilbao Vizcaya Argentaria, and has served as chairman and CEO during the last 16-year stretch.

According to a report in the

Wall Street Journal

on Monday, the 66-year-old banker and other executives received beneficial options grants during the merger talks which ultimately led to millions of dollars in payouts.

Jones received 188,000 new stock options shortly after he entered discussions with BBVA, and less than eight months after his previous options package was approved. The options gave him the right to buy Compass shares at $59.80. The BBVA deal was announced weeks later, and once it closed, Jones received $68.11 per share in cash - a 14% premium that resulted in the $1.6 million payout. Other executives received $2.2 million worth of options cash.

Jones appears to have less sway than other BofA board members when it comes to the CEO replacement or executive compensation. He is not on the board's special CEO search committee, nor is he on its compensation and benefits committee, its executive committee or its corporate governance committee.

However, the man who does chair BofA's compensation committee, Thomas Ryan, has some questionable spots on his own compensation record as well.

Ryan, the 57-year-old Chairman and CEO of

CVS Caremark

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, received $24 million in compensation last year. His $466,115 in perks included expensive trips to charity golf events, for which vendors pay to gain access and curry favor with CVS executives, according to news reports in the spring.

The golf event cost CVS $6,250 for Ryan, and another $19,500 for other executives to attend. Ryan also received $110,854 in personal aircraft use, $2,885 for a company car, $5,798 for home security and $110,854 for financial planning advice.

To the Average Joe, as well as shareholders enraged by the bonus scandals at

American International Group

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Merrill Lynch



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, those perquisites - and Jones' options grants - seem excessive, but they should be put in the broader context of highly paid corporate titans and the long tenure of both executives, which implies a focus on long-term value.

Ryan's time at the helm precedes the merger of CVS with Caremark, having been president and CEO of CVS Pharmacy since 1994. Last year, his compensation dropped 8% as CVS shares fell 28%, closing out the year at $28.74, while earnings climbed 22% to $3.2 billion and revenue grew 15% to $87.5 billion, despite the economic downturn.

Over the past five years, Ryan's compensation has risen by a factor of nearly 3.5 - from $6.95 million in 2003 - although CVS shares rose a more measured 17%. The shares have added another 27% as the markets recovered this year, altogether rising from $28.74 at the end of 2002 to close at $36.48 on Friday.

Last year, Ryan received $8.9 million in stock awards, $4.1 million worth of stock options, and $4.6 million in cash payouts under a "long-term incentive plan." The plan is a complex formula which pays executives half of the incentives in cash, and half in stock, in overlapping three-year cycles. Payments are tied to the compound annual growth rate of earnings per share.

Jones, the director, did nothing legally wrong by benefitting from the options grants, nor did Ryan by taking advantage of perquisites approved by CVS's board. But, by extension, the revelations still represent another black eye for Bank of America.

BofA is struggling to restore its battered reputation following the controversial Merrill Lynch deal -- the main reason current CEO Ken Lewis is heading for the exit. The election of Jones and three other directors to BofA's board more than four months ago was meant to show investors -- taxpayer or otherwise -- that the bank was bringing in fresh blood with banking and regulatory experience to set BofA back on a straight path to success.

Bank of America did not immediately respond to a request for comment.

But these disclosures do stoke the flames of what's become a hot-button issue in the wake of the government's massive bailout efforts -- executive compensation. The revelation about Jones also puts a spotlight on the feeble attempts of regulators to cut back on the controversial practice known as "springloading," in which a board grants options to executives before a company releases positive news that's likely to send shares higher. (A BBVA Compass spokesman told the


that the options grants had nothing to do with the merger talks.)

While BBVA Compass maintains that its grants were not springloading, even if they were, it would be legal. The

Securities and Exchange Commission

decided last year that the practice had to be disclosed in proxy statements, but was not worth enforcement action.

The practice doesn't necessarily hurt shareholders, but it does provide an edge for executives such as Jones, who had special knowledge not available to other market participants.

-- Written by Lauren Tara LaCapra in New York