PNC's Rohr given $3.2M bonus
PNC Financial Services Group said Friday it awarded a nearly $3.2 million bonus to Chairman James Rohr for his work in 2008 — a year when profits slumped but PNC pulled off a mega-merger.
According to a Securities and Exchange Commission filing, the Pittsburgh financial institution is paying its top five executives annual bonuses totaling about $7.4 million. Most of the pay is in restricted company stock, not cash. If the executives leave in the next three years, they forfeit the stock.
PNC's annual profit dropped 40 percent, from almost $1.47 billion in 2007 to $882 million last year. But in a crisis year for the banking industry, PNC ranked first among its 10 big-bank peers for return on shareholder equity, said the filing.
Rohr's bonus was $3.5 million a year ago, and $6.3 million in early 2007. The latter bonus recognized PNC's 2006 profits that totaled $2.6 billion.
In setting the perks, the board noted top executives avoided "many of the poor decisions and business strategies that have weakened many financial institutions and have caused others to fail or be acquired," said the filing.
PNC did not load up on subprime mortgages that soured and crippled some other big banks, such as Washington Mutual and National City Corp.
PNC acquired National City on Dec. 31 for $5.6 billion, a price analysts viewed as a good deal for PNC. The transaction was supported by $7.6 billion PNC received in the first round of the government's Troubled Asset Relief Program.
Terms for the second round of TARP money, outlined Tuesday by the Treasury, would prohibit banks from using the government funds for mergers.
The merger makes the Pittsburgh bank the fifth-largest in the nation, with about $180 billion in deposits. Its 2,747 branches -- including 254 in the Pittsburgh region -- rank as the fourth-most in the country.
PNC President Joseph Guyaux is getting a $1.38 million annual bonus, including $250,000 in cash. He received $1.62 million a year ago, according to a securities filing.
Vice Chairman William Demchak receives a bonus of $1.32 million this year, compared to $1.6 million a year earlier.
Timothy Shack, chief information officer, is getting $834,000, including $250,000 in cash. Richard Johnson, chief financial officer, is getting a bonus of $754,000, all in stock.
"The board's decision takes account of PNC's strong relative performance and the challenging circumstances facing our industry and economy," said spokesman Fred Solomon, explaining the recent payments.