Wilmington Trust Bank Reclaims $2 Million From CEO Because of TARP - Then Boosts His Salary
Bloomberg Video - Jan. 4, 2011
This is not a clawback; these were funds due to be paid out at the end of 2010 that were withheld. And don't feel sorry for the CEO of Delaware's largest bank, itself a recipient of $330 million in TARP funds that have not been paid back, as he had his salary boosted to make up for part of the shortfall.
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Wilmington Trust Corp., the recipient of a $330 million taxpayer bailout, took back about $2 million in pay from Chief Executive Officer Donald Foley because the compensation broke U.S. Treasury Department rules.
Delaware’s largest bank withdrew the payments Dec. 22 “in order to be in full compliance” with rules for the Troubled Asset Relief Program, bank spokesman William Benintende said in an e-mailed statement. The revoked pay includes a $1.75 million signing bonus in cash and restricted stock, and additional restricted shares valued at about $248,000 when they were granted, regulatory filings show. The stock has since fallen.
Treasury sought to stabilize the banking system by pumping $205 billion into 707 financial firms through TARP’s Capital Purchase Program beginning in 2008. Along with the cash came restrictions meant to keep executives from profiting from bailouts. The rules ban cash bonuses and limit incentive payments in restricted stock to one-third of a top executive’s total pay.
“These are rules of unprecedented scope,” said Robert Jackson, a former Treasury lawyer who helped implement them and now teaches at Columbia University School of Law. “In their efforts to comply, companies have sometimes made mistakes.”
Wilmington Trust declined to comment beyond the statement.
Along with revoking the bonus and reducing the incentive payment, the board also boosted Foley’s annual salary 25 percent to $1.5 million, effective Dec. 1, according to a Dec. 23 filing.
Paul Hodgson, who tracks executive compensation at Corporate Library, a corporate governance research and analysis company, said he was unaware of any other case of a bank rescinding pay because it didn’t comply with TARP rules.
Facing regulatory pressure because of mounting losses on construction loans, Wilmington Trust agreed Oct. 31 to sell itself to Buffalo-based M&T Bank Corp. for $351 million, or $3.84 a share, about half the price on the previous trading day. Founded by members of the du Pont family in 1903, the bank has reported six straight quarterly losses.
M&T plans to assume Wilmington Trust’s obligations under TARP. M&T has yet to repay its own $600 million TARP infusion. Both banks got the government payouts in December 2008.
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Start the slideshow - 33 pics:
Ken Lewis, Vikram Pandit, Jamie Dimon, Lloyd Blankfein and John Mack in all their failed-out, bailed-out, busted-out, bonused-out, arrogance.
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Have you seen this one...
We will never pass up an opportunity to talk TARP truth. Dean Baker destroys the grand illusion that the TARP was good for you. There was no financial system save. TARP kept Wall Street in the business of paying bonuses (Blankfein - $125 million), aided by a captured media elite happy to spew nonsense.
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Background reading on TARP...
Tale Of The TARP Two Years Later: How The Elite Media Perpetuated The Lies
Meet Herb Allison: Minister Of Bailout Propaganda
Geithner's Magical Mystery Tour Of TARP Propaganda Has Little Use For Truth
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Watch this clip...
Video - TARP CEOs Strike It Rich On Taxpayers
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Jan 4, 2011 at 3:50 PM
Reader Comments (4)
source...
http://www.boston.com/news/local/breaking_news/2011/01/summers_to_head.html
February to April is the timeline he is looking at. Tick, tick, tick...