PNC Financial CEO pay nearly doubles in 2009, mostly due to restricted stock

PNC Financial increases CEO pay to $16M in 2009

DES MOINES, Iowa — PNC Financial Services Group Inc. CEO James E. Rohr received compensation of $16.6 million in 2009, nearly double the total of 2008, but much of it was restricted stock to comply with government limits placed on companies that took bailout money.

Rohr, 61, received a salary of $1 million in cash and a raise of $1.75 million, paid in stock.

The increase was paid in stock because the federal government required companies to pay incentive compensation in stock instead of cash. The government also limited cash-based pay increases for companies that took money from the Troubled Asset Relief Program, or TARP.

Pittsburgh-based PNC Financial, a bank holding company, borrowed $7.6 billion from TARP. The money was repaid last month and the company said it plans to return to its normal pay procedure for 2010.

Rohr received nearly $14 million in restricted stock and stock options, increasing his total compensation for the year to $16.5 million, up from $8.6 million in 2008.

The 2009 figures, however, included stock-based incentives earned in 2008 but paid in 2009, the company said in documents filed with the Securities and Exchange Commission on Thursday.

In addition, the company said some of the stock awards granted in 2009 may have to be forfeited under the government’s TARP rules and the total figures do not reflect any forfeiture that may occur.

Rohr’s compensation also included retirement plan contributions and insurance premiums paid by the company of more than $179,000.

The Associated Press calculations of total pay include executives’ salary, bonus, incentives, perks, above-market returns on deferred compensation and the estimated value of stock options and awards granted and received during the year. The calculations don’t include changes in the present value of pension benefits, and they sometimes differ from the totals companies list in the summary compensation table of proxy statements filed with the Securities and Exchange Commission.

PNC said it earned $1.01 billion, or $2.17 per share, in the fourth quarter after losing $269 million a year earlier.

The profit and its $5.08 billion in revenue were better than analysts expected

The regulatory filing also reflects shareholder anxiety over executive pay.

Two groups that own company stock are seeking shareholder approval at the annual meeting on April 27 for two pay-related issues.

Trowel Trades S&P 500 Index Fund wants shareholder approval of any future severance agreements with senior executives whenever the deal would provide benefits exceeding 3 times the executives’ base salary and bonus.

The group said severance agreements, often called golden parachutes, “are excessive in light of the high levels of compensation enjoyed by senior executives at the company and U.S. corporations in general.”

The board opposes the proposal and asks shareholders to vote it down, saying it has a long track record of responsible pay practices, including in relation to severance payments.

In a separate issue, the AFL-CIO Reserve Fund wants shareholders to approve a proposal that would require the company to report each year how much money it pays executives above an IRS tax deductibility limit.

Companies can deduct certain executive compensation up to $1 million normally and any incentives paid above that level cannot be deducted, which costs the company in lost tax deductions.

The government placed a $500,000 cap on deductibility for companies that borrowed TARP money, but since PNC has repaid the government, that cap no longer applies, the board said.

The board opposes the proposal. It said it limits nondeductible compensation but believes the board should have the flexibility to decide executive pay.

The board said it already reports nondeductible compensation amounts and further reporting requirements would be an unnecessary burden.