NASHVILLE, Tenn. (AP) ¿ The Nashville area's largest banks are continuing in some cases to give bonuses, generous severance payments and pay raises to some executives. The Tennessean reported Sunday that four of the five CEOs of Nashville's five largest banks received no bonus for 2008, though some other executives did get payouts. For instance, a filing earlier this month with the U.S. Securities and Exchange Commission showed Birmingham, Ala.-based Regions Financial Corp. paid G. Douglas Edwards $8.6 million in severance payments. Edwards retired last year as president and CEO of Regions' investment bank, Morgan Keegan in Memphis. Congress passed a law prohibiting bonuses for banks receiving government money, but that didn't apply to contracts written before Feb. 11, said John Cornell, an executive compensation attorney in New York for Jones Day. Regions is defending itself against several lawsuits brought in 2007 and 2008 by investors who say Morgan Keegan violated securities laws by failing to disclose it was investing their money in subprime mortgages and risky debt.
A Regions spokesman said Edwards' retirement had nothing to do with the lawsuits, and he "enjoyed a long and distinguished career with Morgan Keegan." Bank of America paid Bruce Hammonds, a former MBNA executive who retired at the end of last year, $6.8 million in January of this year, according to the bank's proxy filing. A Bank of America spokesman said Hammonds was contractually obligated to receive the money under his retention agreement with Bank of America in connection with the company's 2006 purchase of MBNA Corp. The Feb. 11 loophole allowed banks such as Regions and Bank of America to honor severance agreements for departing executives last year, Cornell said. Some activists are taking to the streets over the pay issue. Last Thursday, groups of unions and health insurance advocates planted themselves in front of Bank of America buildings across the country, including Nashville, to "protest corporate greed," said Doug Collier, president of the Service Employees International Union Local 205 in Nashville. "They should stop taking these bonuses," Collier said. "They should adjust their salaries as they take bailout money, taxpayer dollars. It amazes me that they can pay these lavish payments to people who have run these companies into the ground. Where does corporate greed end now?"
Banks say they are paying that taxpayer money back to the government, with interest. And none of the CEOs of the five largest banks received bonuses for 2008, except for Pinnacle Financial Partners' Terry Turner, who pointed out that his company's stock price was up 21 percent for 2008 and has fallen only recently. Turner said his pay is based on a comparison with other banks of similar size and his successful handling of an acquisition of fellow bank Mid-America Bancshares. A spokesman for Suntrust Banks said the bank eliminated its cash-based incentives in 2008 and tied incentives to stock performance. The value of stock awards given to the bank CEO, James Wells, has fallen 90 percent, the bank said. First Horizon National Corp., the parent company of First Tennessee Bank, gave some pay increases to executives last year, but a spokesman said that it was an almost all-new team of executives. Gerald Baker, the departing chief executive officer of First Horizon, got a pay raise of $27,000 to $817,654 last year because he took on a new job as chairman, said John Daniel, executive vice president and head of human resources. Baker has since retired.