Regional bank Marshall & Ilsley is cutting out cash bonuses for its executives in 2009 to comply with standards under the federal bailout program.
In a regulatory filing Tuesday, the Milwaukee-based bank said its board changed the compensation arrangements for its executive officers to comply with the program. It will grant "salary stock" to its executives for 2010 to replace bonuses, stock option grants, certain retirement benefits and severance benefits that are not allowed under the program.
Marshall & Ilsley received $1.7 billion under federal government's Troubled Asset Relief Program, or TARP.
The grants will take the form of common shares of stock. They'll be granted each payday, with the number of shares based on the stock price at the time.
The shares will be fully vested when they are awarded but the executives will be restricted from transferring the shares. One-third of the shares will be transferrable each year for three years after they are awarded.
Under the plan, Chairman and CEO Mark F. Furlong's salary will remain unchanged at $875,000 in 2010. He will also receive stock salary of $2.1 million.
The company did not award bonuses in 2008. In 2007, Furlong received a bonus of $316,876.
Chief Financial Officer Gregory A. Smith's salary will stay at $480,000. He will also receive stock salary of $720,000. O'Neill got a $121,031 bonus in 2007.
Thomas J. O'Neill, the senior vice president, will again receive a salary of $415,000. He will also receive stock salary of $685,000. O'Neill he was given a bonus of $121,031 in 2007.
Kenneth C. Krei, chairman and CEO of subsidiary M&I Trust Co., will get a salary increase to $480,000 from $415,000, plus stock salary of $720,000. He received a 2007 bonus of $115,329.
The company will also grant each executive officer a number of shares of restricted stock equal to half their aggregate annual base salary. The shares of restricted stock will be awarded on Jan. 4, and will be valued based on the closing price per share of the company's common stock on that date.
In morning trading, Marshall and Ilsley shares added 3 cents to $5.48.