Updated from 12:57 p.m. ESTThe Treasury Department says it is reviewing official concerns about the timing and circumstances of a more than $12 million retirement package awarded the ex-CEO of South Carolina's largest bank. The acknowledgement comes several days after The South Financial Group ( TSFG) said it had received preliminary approval for a $347 million investment from the Troubled Asset Relief Program, or TARP, which puts restrictions on pay for executives of banks that receive investments. TheStreet.com first reported ex-CEO Mack Whittle's earlier-than-expected retirement on Oct. 29, prompting South Carolina Gov. Mark Sanford, a Republican, to request in a Nov. 7 letter that Treasury investigate the situation. "Treasury has received the letter and we are currently reviewing it," wrote spokeswoman Jennifer Zuccarelli, in an email message to TheStreet.com . Zuccarelli did not respond to follow-up questions from TheStreet.com asking whether the Treasury Department was aware of Sanford's letter when it granted preliminary approval to the bank for the investment, or whether it was aware of another letter raising similar concerns sent by Rep. Bob Inglis (R., S.C.). The South Financial Group announced the government's approval of the investment on Nov. 14. "We get lots of correspondence," Zuccarelli said in an initial telephone conversation on Wednesday when TheStreet.com asked about the letter. In a letter to Treasury dated Nov. 12, Whittle defended his retirement package, pointing out it had been negotiated before the TARP was even in existence. He expressed a willingness to modify the arrangement if it jeopardized the bank's application for funds. "If the only item standing in the way of TSFG's receipt of a TARP capital allocation is my retirement agreement, then I am willing to discuss with the Treasury and the company the aspects of my agreement that are in excess of the current TARP limitations and in good faith mutually agree to something that allows the TARP investment to be made," Whittle wrote.
The South Financial Group drew widespread criticism for the timing of Whittle's golden parachute. The South Financial Group's shares have fallen to as low as $2.48 per share from more than $27 last year, due to troubled real estate loans. Whittle's exact compensation is difficult to calculate, due to benefits, stocks options and the like, but the bank has said it will cost shareholders at least $12 million. Some estimates have put it as high as $18 million. The situation has also prompted at least one shareholder lawsuit, which is currently working its way through the courts. Nine of the nation's largest banks, including Bank of America ( BAC ) JPMorgan Chase ( JPM) Citigroup ( C) and Wells Fargo ( WFC)), agreed to an initial round of investments. A host of regional banks, including PNC Financial Services ( PNC)and KeyCorp ( KEY)have subsequently disclosed that they have received U.S. government money.