NEW YORK (
said Thursday it will boost base salaries for top executives with stock rather than cash, aligning their personal finances more clearly with shareholder priorities amid a public backlash against outsized compensation for bankers.
President and CEO John Stumpf and three other top executives received higher compensation in stock, which they cannot sell until Wells repays $25 billion worth of bailout funds to the Treasury Department. Cash salaries were largely unchanged from 2008.
"Wells Fargo's compensation philosophy has always been to pay competitively, to reward performance relative to its peer group and to align management's interests with those of our shareholders," Steve Sanger, chair of Wells' human resources board committee, said in a statement. "We must balance the need to appropriately pay and retain our top-performing team members."
He added that the new rules considered the need to retain top-performing employees with the "responsibility" of the Treasury Department's investment for taxpayers made through the Troubled Asset Relief Program.
The public outcry and negative media attention over bonuses at troubled firms receiving tens of billions of dollars worth of taxpayer support has continued unabated, particularly towards
American International Group
Bank of America's
, as well as others like
Legislation is sure to emerge in some form or another, with executive compensation addressed in the president's regulatory overhaul plan, and a key House committee passed another measure last week. The bill would give shareholders more say on pay at major financial firms and give regulators the ability to step in to address pay packages that are "inappropriate or imprudently risky" for firms with more than $1 billion in assets.
"We believe that these increases in compensation adhere to both the letter and spirit of the new executive compensation rules," said Sanger.
Stumpf will receive $4.7 million in stock salary, along with restricted rights to acquire 108,528 shares. The rights begin to vest in 2011, but are also subject to the bailout repayment rule.
Mark Oman, head of home and consumer lending, will receive $3.3 million in stock, while Dave Hoyt, who runs the wholesale banking division, will receive $3.2 million. CFO Howard Atkins' has been granted $2.6 million.
Stumpf's cash salary will be $900,000, up slightly from $878,920 last year. Atkins and Hoyt will each receive $700,000, up from the $598,767 each received last year. Oman will get $600,000 in cash, up from $598,767 as well.
None of the executives received stock awards in 2008, because of weak performance, though each held options at year-end. Stumpf received $12.9 million worth of options; Hoyt held $7.1 million; Atkins held $3.8 million; and Oman held $3.3 million.
Wells' board said the decisions were made with Treasury Department guidance, as well as developing pay practices at 10 major competitors like BofA, Citi,
Bank of New York Mellon
Written by Lauren Tara LaCapra in New York