Magazine article American Banker

Citicorp's 'Golden Handcuffs' Besides Salary Hikes for Execs, Big Banks Plan Stock Bonuses

Magazine article American Banker

Citicorp's 'Golden Handcuffs' Besides Salary Hikes for Execs, Big Banks Plan Stock Bonuses

Article excerpt

Citicorp's 'Golden Handcuffs'

NEW YORK -- Top executives at Citicorp would share in a pool of restricted stock worth some $20 million under a bonus plan that stockholders will consider at the company's annual meeting this month.

Commonly called "golden handcuffs," the restrictions on the stock would prevent the executive from trading or selling the awarded shares for a period of up to 10 years -- a significant hold on employees who might otherwise jump to competitors.

The employee would have to forfeit the stock if he or she leaves the bank within the restricted period, except for retirement or disability. The length of the restriction for each award would be determined by the compensation committee of Citicorp's board of directors.

Citicorp thus would become another in a growing line of commercial banks that are dangling stock awards as incentives for key employees to stay on board for a number of years. More than half of the nation's 10 largest-asset banks have some form of restricted stock in their incentive programs. The proposal by Citicorp management would rank among the larger restricted stock programs at banks by providing a pool of 325,000 shares of common stock, worth more than $61 per share as of Wednesday. Eligible employees are "key executives," including members of the bank's policy committee, according to Citicorp's proxy statement.

Stockholders at Chemical Bank, Bankers Trust Co., and Chase Manhattan Corp. each have already approved pools of restricted stock for bonus awards that are worth more than $20 million, using current market prices, according to their proxy statements. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.