Magazine article American Banker

Firstar Slashed CEO's Bonus by More Than Half

Magazine article American Banker

Firstar Slashed CEO's Bonus by More Than Half

Article excerpt

Firstar Corp. chairman Roger L. Fitzsimonds received a 1996 bonus that was less than half of 1995's, according to the bank's recently released proxy.

Analysts said the diminished bonus was due to a major restructuring at the Milwaukee-based company.

Mr. Fitzsimonds, who is also chief executive officer, received a 4% salary increase to $642,600, but his bonus was chopped by more than half to $163,500, according to the proxy. His total cash compensation declined 17%.

That's good, said analyst Ben Crabtree of Dain Bosworth Inc. "They're very upright people," Mr. Crabtree said of Firstar's management. "If they didn't perform as well as the year before, they shouldn't get paid as well as the year before."

Firstar, with $19.5 billion of assets, earned $250 million in 1996, which was up 9% from 1995. But Firstar bases its bonuses on profitability. Because the company didn't perform in the top quartile of its peer group, executive bonuses were cut.

Even though his cash compensation was slashed, Mr. Fitzsimonds' long-term incentive payout increased 39% to $596,200, and he received stock options of $172,600, nearly twice the options he received a year ago.

The extensive reorganization began early last year and included the elimination of 2,500 jobs, or 26% of Firstar's work force. The company took a $50 million pretax restructuring charge in the first quarter of 1996 to cover the program.

The restructuring also apparently caused some revenue disruption, as income in some areas, including commercial lending, came in short in the fourth quarter. …

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