SAN FRANCISCO (
is paying $25 million in retention bonuses to four of its top executives in stock that vests over time, rather than in cash, aligning its pay policy with what the government's pay czar has advocated.
Wells Fargo said Thursday that Chief Executive Officer John Stumpf will receive shares valued at $10 million, while Chief Financial Officer Howard Atkins; Dave Hoyt, the head of Wholesale Banking; and Mark Oman, the head of home and consumer lending, will each receive $5 million worth of stock.
The shares vest after three years if certain performance goals are met. Wells Fargo requires executives to retain a certain portion of their holdings for as long as they remain employed by the company, and bonuses are forfeited if any of the executives leave to work for a competitor.
Neither Stumpf, Atkins, Hoyt or Oman will receive any cash bonuses.
Executive compensation has been a hot-button topic in the latter half of the year, as bailed-out financial firms returned to profitability while the average consumer is still struggling with joblessness and debt.
revised its compensation practices after it came under fire for heady bonuses, and departing
Bank of America
CEO Ken Lewis is forgoing any compensation in 2009.
have been scrutinized for issuing $6 million compensation packages to their CEOs, while the companies are surviving on a taxpayer lifeline. Elsewhere,
American International Group
Vice Chairman and general counsel Anastasia Kelly resigned this week -- as CEO Bob Benmosche also previously threatened to do -- after months of wrangling over compensation with Kenneth Feinberg, the Obama administration's pay czar.
In a pre-emptive defense, Steve Sanger, chair of the human resources committee on Wells Fargo's board, noted that Stumpf, Atkins, Hoyt and Oman have helped Wells Fargo generate "record profits" this year. He also pointed out that they are shepherding the bank through the end of an unprecedented financial crisis and economic downturn, while engineering Wells' large and complex merger with Wachovia.
They are also being "increasingly and aggressively recruited by competitors," Sanger asserted.
"We believe ... a key to retaining that talent for the long-term is to compensate our senior leaders competitively and to align their interests with those of our shareholders," Sanger, the former CEO of
, said in a statement.
Wells Fargo shares were recently up 1.5% at $27.21.
Written by Lauren Tara LaCapra in New York.