WILMINGTON, Del. (
) -- Wilmington Trust
( WL) rescinded CEO Donald Foley's $1.75 million signing bonus, according to a December filing with the
Securities and Exchange Commission
, but the company's board of directors quickly increased his salary by a very generous 25%.
According to Bloomberg -- which first reported the bonus forfeiture -- company spokesman William Benintende confirmed that the payment was revoked "in order to be in full compliance" with the Troubled Assets Relief Program, or TARP.
Foley was elevated to the CEO position in June when former CEO Ted Cecala announced his retirement after 31 years with the company. Foley had previously served as the chairman of the Wilmington's audit committee for over three years.
At that time, along with the signing bonus - which consisted of $450 thousand in cash and $1.3 million as a "one time grant of restricted shares of the Company stock," Foley's annual salary was set at $1.2 million. In the December filing announcing the rescission of the signing bonus, Wilmington Trust also said Foley's salary was being increased to $1.5 million.
The CEO's original employment offer letter clearly stipulated that all payments would have to be consistent with TARP restrictions and included "the obligation to repay any amounts paid or benefits provided to you that are later determined to be in violation of any such requirements."
After a dismal third quarter, Wilmington Trust announced on November 1 an agreement to be acquired by
M&T Bank Corp.
for about $351 million, which was roughly equal to Wilmington's tangible book value according to SNL Financial, but was a 46% discount to Wilmington's closing price of $7.11 on October 29.
The merger is expected to be completed in mid-2011, with M&T taking on responsibility to repay Wilmington's $330 million in TARP money.
While M&T hasn't announced any executive role for Foley after the deal is completed, he is slated to join acquiring company's board of directors.
Written by Philip van Doorn in Jupiter, Fla.
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Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for TheStreet.com Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.