Truist approves $4.5M bonuses for CFO and top consumer banker

Brief description of the dive:

• Truist awarded Chief Financial Officer Mike Maguire and Dontá Wilson, chief consumer and small business banking officer, $4.5 million in “leadership awards,” according to a Friday report submitting documents to the Securities and Exchange Commission.
• The performance share unit awards were made “to support the retention of key management personnel required to fully capitalize on the business opportunities” created by the sale. Truist Insurance HoldingsBoth directors serve on the board of directors for the Charlotte, North Carolina-based bank, the filing said.
• The bonuses for Maguire and Wilson are among the changes the bank’s human capital committee has made to its executive compensation program as it “strategic planning processThe bank launched last September with a goal of cutting costs by $750 million over 12 to 18 months.

Diving Insight:

To determine the bonus amounts for Maguire and Wilson, the committee “considered the expected contribution of the CEO to the success of the Company, the retention strength of the CEO’s outstanding equity awards in an increasingly competitive environment, the CEO’s total target direct compensation, and the CEO’s skill set and attractiveness in the talent market,” the document said.

Maguire estimates his salary last year was $3.6 million. the latest bank power of attorney. Maguire, who joined Truist’s predecessor SunTrust in 2001became the financial director of September 2022Wilson, whose compensation last year was $4.7 million, spent about 24 years at BB&T before its merger with SunTrust in 2019 and currently holds the position since last NovemberAccording to His LinkedIn profile.

The awards are subject to Truist meeting minimum capital requirements and a modifier based on total shareholder return relative to the KBW Nasdaq Bank Index, each of which will be measured through Aug. 31, 2027. If the minimum capital requirements are met, the modifier will result in a payout of between 75% and 125% of the target, the filing noted.

The committee may also reduce payouts “based on business factors and adverse risk impacts, including industry conditions, performance relative to competitors, regulatory changes and changes in capital requirements,” the document said.

While the one-time equity awards represent Truist’s investment in some of its executives, the bank has seen several executive departures over the past year, including IT DirectorChief Audit Inspector and Marketing DirectorLast week, Truist said that Allison Robinsonlenders Branch and Corporate Banking Director, left the company after more than two decades at BB&T and then Truist.

Sometimes, such executive bonuses are met with resistance, as in the case of JPMorgan Chase. CEO Jamie Dimon received a $52 million bonus two years ago. Other times they work to the bank’s advantage, e.g. Morgan Stanley Announces CEO Candidates Andy Saperstein and Dan Simkowitz received a $20 million bonus to retain the team despite not being selected for the position.

Maguire and Wilson’s awards “are designed to place a premium on creating shareholder value while also providing incentives for these directors to maintain appropriate levels of capital and manage risk appropriately,” the document reads.

In February, the bank’s compensation and human capital committee decided to move away from its previous annual performance bonus program, which based bonuses on three components and relative weightings, to one that “emphasizes a comprehensive assessment of performance across multiple categories.”

These include financial metrics such as adjusted earnings per share, adjusted noninterest expense, common equity Tier 1 ratio, adjusted net income to common shareholders and efficiency ratio. It also considers “nonfinancial strategic priority categories” such as “Simplify and optimize resources and controls” and “Winning behaviors.”

Truist CEO Bill Rogers said in July The bank is “fully committed” to its goal of keeping spending flat this year compared with 2023, although the lender is investing in specific areas of the business such as payments and mid-market lending.