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Two top Wachovia executives are likely to get their severance packages now that they're leaving. Ben Jenkins, president of the general bank, could get $17.6 million, according to a securities filing in March. Steve Cummings, head of corporate and investment banking, could get $20.3 million.
The severance packages would be triggered only under certain circumstances: First, the acquisition, or “change in control,” has to be completed. Second, Jenkins and Cummings must be “terminated without cause” or resign with “good reason,” such as a demotion. The executives must also sign confidentiality and non-compete agreements if they leave Wachovia.
In 2006, the bank's shareholders approved a proposal, which the board later adopted as policy, that essentially capped future executives' severance agreements at three times their annual salary and bonus.
Others are in line for less. When Bob Steel was hired as Wachovia chief executive in July, he asked that his employment agreement not include any severance provisions. His 1.5million options to buy company stock are currently worthless because the stock price is well below the option price of $9.08 per share. His 2 million shares of performance-based stock will not vest unless the Wells Fargo shares reach at least $100.45 per share – more than triple Thursday's closing price – in the next six years. If Wachovia had remained independent, those shares would have vested fully at $30, but the target was “equitably adjusted” to account for the merged company.
Chief financial officer David Zwiener has similar targets on his 800,000 performance-based shares. He received an upfront bonus of $4 million when he was hired by Wachovia in September, to cover “one-time transition expenses” and the bonus he likely would have received from his former employer, the Carlyle Group private-equity firm.
David Carroll, the lone Wachovia executive set to join Wells Fargo's new top executive team, could have received $19.1 million in severance and a bonus if he had decided to leave the bank.
