Bailed-Out Bank Execs Get Payouts
By ProPublica
Yesterday, the Treasury Department released new rules on how much banks that received TARP money can pay their executives. Among the rules is one that prohibits golden parachutes – defined as any payment to a departing exec simply because the exec is leaving. But an examination of public filings shows that a number of executives at banks that received TARP funds have received large payments just for resigning. It’s unclear if the new rules will apply retroactively.
Tune in this afternoon to catch a segment we did with public radio’s Marketplace that focuses on a few of these. Below is a rundown of these execs and the payouts they received.
Name Bank Bailout Exec Payout Jack Gibson, CEO Hampton Roads Bankshares
$80,347,000 In addition to covering Gibson’s country club costs, the bank awarded Gibson $1.3 million for “consulting duties” upon his retirement. The bank says Treasury approved the arrangement. (Link) Lisa Binder, President and COO Associated Banc-Corp
$525,000,000 Binder received $1.65 million in exchange for agreeing not to compete with the Wisconsin bank for one year. The bank said the payment was not a golden parachute and that it had consulted with outside counsel to make sure it complied with the law. (Link) Mack Whittle, CEO South Financial Group
$347,000,000 Whittle was originally scheduled to retire as late as Dec. 30, 2008, but he retired on Oct. 24, the same day the bank applied for TARP funds. As such, his retirement was not affected by the golden parachute limits, allowing him to keep at least $2 million more than he would have been able to. His total retirement package totaled $18 million. Treasury awarded the bank TARP funds on Dec. 5. After shareholder lawsuits objecting to the arrangement, the bank reached a settlement that among other things, reformed oversight of compensation at the bank. A bank spokesperson said “the matter is settled and we are moving forward.” (Link) Thomas Hoaglin, President and CEO Huntington Bancshares
$1,398,071,000 Hoaglin was owed as much as $2.6 million for retiring in February, according to a bank disclosure. The bank did not return our calls seeking comment.(Link) David Edson, Executive Vice President Umpqua
$214,181,000 Edson was owed at least $387,000 for retiring in March, according to a bank disclosure. Umpqua General Counsel Steve Philpott told us the payments were made subject to the bank’s employment agreement with Edson, and that it was “fully compliant” with its agreement with the Treasury Department. (Link) Scott McBrair, Executive Vice President Webster Financial
$400,000,000 McBrair received more than $420,000 in severance payments, according to a public filing. The bank did not respond to our requests for comment. (Link) Robin VanCastle, CFO Taylor Capital
$104,823,000 VanCastle received $270,000 upon her resignation in March, according to a public filing. Bank spokesman Mark Nystuen declined to comment on the arrangement. (Link) Robert New, CEO F.N.B. Corporation
$100,000,000 New will receive $990,000 in severance payments, according to the February severance agreement. The bank also agreed to purchase New’s house for$748,000, the price he paid for it two years prior. The bank did not return our calls seeking comment.(Link)
by Paul Kiel, ProPublica – June 11, 2009
