Just for taking the job, Wachovia Corp.'s new chief financial officer gets an upfront bonus of $4 million, 1 million stock options and 800,000 shares of restricted stock, the Charlotte bank said in a filing this morning.
The payments are to compensate David Zwiener for partnership equity, a 2008 bonus and other benefits he will forfeit by leaving the Carlyle Group private-equity firm, where he was a managing director. Zwiener, whose appointment was announced late Monday, will replace the retiring Tom Wurtz no later than Oct. 1.
The $4 million payment covers “one-time transition expenses” and the expected value of his Carlyle bonus, according to the filing. The 1 million options vest in three equal installments and are good for 10 years.
The restricted shares vest based on the performance of Wachovia's stock. The company's shares must rise to $35 within six years for the grant to fully vest, and Zwiener must stay with the company for three years. In early morning trading, Wachovia shares were down more than 10 percent to $17.
Under his employment agreement, the new CFO each year gets a salary of $500,000, a target bonus of $3.75 million and a target stock grant of $3.75 million. For 2008, he will receive a guaranteed minimum bonus of $937,500, payable in February 2009.
The agreement also allows for severance payments if he is terminated for “good reason” or “without cause.” The company also will cover taxes owed if he loses his job in the case of a merger or acquisition.