Webster Bank has altered pay packages for chairman and CEO James Smith and his lieutenants, increasing their base salaries but lowering their overall total compensation opportunity, as the Waterbury lender complies with strict executive pay restrictions from accepting government bailout funds.
The compensation modifications increase the executives’ base salaries, eliminate their annual cash bonuses, and tie long-term incentives to performance of the $17 billion-asset bank.
The regional bank accepted $400 million in government aid late last year under the Troubled Asset Relief Program (TARP). Until it repays the taxpayer money, it must comply with restrictions on executive pay set out by the Treasury Department and stimulus legislation.
Under his revised contract, Smith will see his total compensation opportunity fall 32 percent from the year ago period. His 2009 annual salary will be $1.3 million, compared to $879,800 in 2008, with all of the increase paid in the bank’s stock.
Smith’s long-term incentive payment will not exceed $922,233, compared to $1.5 million in 2008, according to Securities and Exchange Commission filing.
The bank’s directors also modified compensation for Gerald P. Plush, senior executive vice president, chief financial officer and chief risk officer; Joseph J. Savage, executive vice president of commercial banking; and Jeffrey N. Brown, executive vice president and chief administrative officer, the SEC filing said.
All long term incentives will be paid in restricted stock, which will not vest until three years or when the bank repays its government funds.
