Fifth Third Bancorp has modified the compensation packages of its top executives in order to comply with requirements set out under the bailout package, according to a new report.
In a filing with the Securities and Exchange Commission, the Ohio-based company said it had adjusted its employment contracts with its senior executives and next 20 highest-earning employees in response to restrictions imposed in June.
That same month, Fifth Third took steps towards leaving the Troubled Asset Relief Program by completing a $1 billion stock offering and earmarking some of the receipts to help redeem the $3.4 billion in stock and warrants it sold the government in exchange for bailout assistance.
At the time, Fifth Third was following the lead of other bailed-out banks troubled by Treasury restrictions on executive pay, dividend distributions, and other similar business operations issues.
Because the new restrictions on executive pay prohibit the payment of large year-end bonuses, Fifth Third executives now receive larger cash salaries than before, as well as allotments of phantom stock units that track the company's market performance.
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