A shift at the top of the power structure last year at Synovus Financial Corp. more than doubled the compensation of one executive and took a chunk of earnings from another.
In its proxy statement filed Monday with the U.S. Securities and Exchange Commission, the Columbus-based banking firm reported that Kessel Stelling took home a total pay package of $884,851 in 2010 as he took the reins of the financially strapped company.
It was in June that Stelling, president and chief operating officer, assumed day-to-day control of Synovus from Richard Anthony, its chairman and then-chief executive officer, after the latter took a medical leave of absence. Anthony needed time away from management pressures to battle Wegener’s Syndrome, a serious form of vasculitis that inflames blood vessels, restricting blood flow to key organs of the body, including the kidneys, lungs and the upper respiratory tract.
Four months later, as Anthony was rebounding from the illness, the Synovus board of directors made the decision to promote Stelling to CEO permanently, while retaining Anthony as chairman of the board. The move boosted Stelling’s pay package from $369,335 the year before.
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Anthony, who had received total compensation of nearly $1.2 million in 2009, saw his package slip to $979,132 last year. His base pay, however, fell sharply from $928,200 to $735,420.
Like most companies, Synovus executive compensation includes base pay, stock awards, retirement plan contributions and bonuses. In the case of Synovus, which hasn’t reported a quarterly profit in 10 quarters and has written off nearly $3 billion in bad real-estate loans, no bonuses were awarded last year, just as they weren’t the three years prior.
“Although Synovus previously announced its expectations of returning to profitability during 2010, the economic recovery in the U.S. was slower than we anticipated,” the company said in Monday’s proxy filing. “Consequently, we continued to experience credit-related losses which negatively impacted our earnings and results of operations, and our stock price did not recover from its decline.”
Steps taken by management in 2010 to help the company through the financial storm, the filing said, was raising $1.1 billion in a public stock offering and simplifying regulatory oversight while becoming more efficient through the consolidation of 30 separate bank charters into just one. It also disposed of $1.2 billion in distressed assets during the year.
One of the bigger moves undertaken by the executive team was updating its three-year strategic plan, then announcing its results in January of this year. The company noted in the filing it will generate expense savings of $100 million by the end of 2012. It did not mention most of those savings come from cutting 850 jobs this year. It has eliminated more than 2,000 positions since 2008, with its work force expected to settle under 5,300 this year.
Pointing to executive compensation, the filing noted the lack of bonuses and the fact that no base salaries have increased in more than three years, with the exception of those related to the promotions of Stelling and Roy Dallis Copeland Jr., who was elevated from bank CEO in Rome, Ga., to executive vice president and chief banking officer. It also said long-term incentive awards have restrictions, including that the firm turn a profit for two quarters in a row. Stock options also are problematic for top management.
“Outstanding stock options are ‘underwater,’ meaning that the exercise price exceeds the current value of the shares. This will continue until stock prices return to their former levels,” the company said in the filing.
Synovus shares have languished below $3 per share for much of the past year, pushing to a 52-week high of $3.92 on March 17, 2010, before steadily declining. The stock briefly dipped below $2 per share last fall — hitting a low of $1.94 on Nov. 10 — before recovering to its current price near $2.50.
Aside from Stelling, Anthony and Copeland, the Synovus compensation chart included with the proxy filing includes Thomas J. Prescott, executive vice president and chief financial officer; Elizabeth R. James, retired vice chairman and chief people officer; and Samuel F. Hatcher, executive vice president, general counsel and secretary.
Prescott earned a total package of $560,421 last year, down from $538,069 in 2009, with his base salary at $387,000 both years. Copeland picked up $680,479 in total compensation in 2010, up from $344,609 the year before. His base salary rose from $242,285 to $311,154.
James, who announced her retirement two months ago, received a package of $610,428 in 2010, up from $561,739 a year earlier. Her base salary stood at $431,000. Hatcher’s compensation totaled $490,750 last year, up from $335,875 in 2009, with a base salary of $325,000 both years.
“We believe that the compensation delivered to each named executive officer in 2010 was fair, reasonable and competitive,” Synovus said in its filing.