PNC pays bonuses to execs after getting TARP money

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Fri Feb-13-09 09:35 PM
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PNC pays bonuses to execs after getting TARP money

Source: Reuters

NEW YORK, Feb 13 (Reuters) - PNC Financial Services Group Inc (PNC.N) said on Friday it has awarded bonuses for 2008 to its chief executive and other top officers, becoming the largest recipient of taxpayer money under the government's $700 billion Troubled Asset Relief Program to do so.

Chief Executive James Rohr was awarded a $3 million bonus, down from $3.5 million a year earlier. PNC also awarded bonuses of $1.3 million to President Joseph Guyaux, $1.24 million to Senior Vice Chairman William Demchack, $785,400 to Vice Chairman Timothy Shack and $710,000 to Chief Financial Officer Richard Johnson.

The awards are primarily in the form of restricted stock, and none of the awards to Rohr, Demchak and Johnson is in cash, the Pittsburgh-based bank said. Executives were eligible for awards under a 1996 incentive plan, it said.

PNC disclosed the awards in a U.S. Securities and Exchange Commission filing, nine days after posting a $248 million loss and announcing plans to cut 5,800 jobs by 2011. Shares of the bank have fallen 67.5 percent from their record high Sept. 19.

"The issue is how in the world banks keep good people to get us out of the hole we're in," said Brent Longnecker, president of Longnecker & Associates in Houston, an executive compensation specialist. "You have to do the right thing, from an attraction, retention and motivation perspective."

Investors, politicians and regulators have faulted banks for doling out big bonuses as the industry hemorrhages losses from soured loans, and tightens credit generally.

Read more: http://www.reuters.com/article/bondsNews/idUSN136517920090214

http://www.sourcewatch.org/index.php?title=Riggs_Bank_N.A.

Riggs Bank N.A., founded in 1836, also called Riggs National Bank, "which provides banking services to most of Washington's foreign embassies and to American consulates worldwide," has been "swept up in controversy. Federal law enforcement officials, Congressional investigators and banking regulators are scouring Riggs accounts in a wide-ranging investigation revolving around the netherworlds of terrorist financing, money laundering and the seamier geopolitics of Big Oil," according to Timothy O'Brien's April 11, 2004, New York Times expose.

In July 2004 it was announced that Riggs was going to be bought out by PNC Financial Services Group, Inc. According to the Washington Post, "All Riggs branches will assume the PNC bank name... Meanwhile, PNC will dispense entirely with all of Riggs's international and embassy banking operations, which led to the problems Riggs faces today."

Bush family connections

As of May 2000, Jonathan J. Bush, brother of President George H.W. Bush, was "Chairman and Chief Executive Officer of J. Bush & Co., an investment management company he founded in 1970, which Riggs acquired in 1997", according to a Riggs Bank Press Release. At the same time, Mr. Jonathan J. Bush was also elected President & Chief Executive Officer and a Director of "RIMCO, a wholly owned investment management subsidiary".

News quotes

Timothy O'Brien, "Regulators Fine Riggs $25 Million," New York Times, May 14, 2004:
"Federal regulators fined the Riggs National Corporation, the parent company of Riggs Bank, $25 million yesterday for failing to report suspicious activity, the largest penalty ever assessed against a domestic bank in connection with money laundering.
"The fine stems from Riggs's failure over at least the last two years to actively monitor suspect financial transfers through Saudi Arabian and Equatorial Guinean accounts held by the bank. The accounts are still being scrutinized as possible conduits for terrorist funds or for the proceeds of graft."

"Bank fined $25 million in terrorism probe," CNN, May 13, 2004:

"The civil fine against the midsize Washington bank with a near-exclusive franchise on business with the capital's diplomatic community is the largest ever imposed on a financial institution for such violations, experts said. It had been expected.
"The action by the Treasury Department's Office of the Comptroller of the Currency came in an order made public late Thursday. It followed weeks of negotiations between Riggs officials and the banking regulators.

"The order said the bank's internal controls 'were, and continue to be, seriously deficient.'"

"Riggs said last month it is pulling back from its foreign operations and that the head of the family that controls the bank was resigning from the board of its parent company. Investors viewed the moves as steps toward recovery or a possible sale. ...

The bank also indicated that family patriarch Joe Allbritton, Riggs's former chief executive, is resigning as vice chairman of the parent company's board of directors. Timothy Coughlin, president of parent Riggs National Corp., also is resigning."

...more...