Just a couple of weeks before the Treasury Department issued its revised rules on compensation for companies getting money through the Troubled Asset Relief Program, First Midwest Bancorp, Inc. filed this document disclosing that its top five executives would be given more compensation in the form of restricted stock awards.
The company, which operates First Midwest Bank in Itasca, Ill., did not disclose how many shares each executive would be granted. But it filed a registration statement with the SEC adding 1 million shares to the stock authorized under its existing long-term incentive plan.
First Midwest Bancorp recognized that its participation in the TARP Capital Purchase Program subjected it to limitations on executive compensation for as long as it still had loan proceeds outstanding. That is why the bank's filing included two caveats on the grants:
The shares do not fully vest until the Company redeems the Preferred Shares and the executive completes a ten day service period following such redemption, unless earlier full vesting is permitted under EESA Requirements.""In the event the award does not comply with EESA Requirements, the non-conforming provisions will be modified to comply with the EESA Requirements.
A summary of of the Interim Final Rule on TARP Standards for Compensation and Corporate Governance is available here (or - if you've got a bit more time on your hands - you can read the 123-page version here).
The bank's restricted stock grant seems consistent with the TARP compensation rules (both those in effect prior to June 10 and those just published). As the Treasury's new rules state, the intent is to align incentives for executives with those of shareholders and taxpayers, to ensure that executives are subject to a 'clawback' of some compensation if positive results prove illusory.
First Midwest describes itself as "one of the Chicago metropolitan area's largest independent bank holding companies" with approximately 100 offices in 62 communities.
In related news, in late May, the bank's board declared a quarterly common stock dividend of $0.01 per share, to be paid on July 14 to shareholders of record as of June 26. That is the same amount the bank paid after the first quarter of 2009. However, both amounts are significantly lower than the dividends that the bank historically has paid each quarter during the past five years, which ranged from $0.22 per share to $0.31 per share.
published June 23, 2009, 0 Comments
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