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At rescued banks, perks keep rolling
Fewer perks, more pay
Some banks, mindful of the popular resentment over the government's $700 billion bailout of banks and other financial companies, have eliminated certain perks. And a few executives have voluntarily given up benefits that lawmakers have criticized as excessive. At Bank of America, for instance, senior executives will no longer use corporate jets for personal travel starting this year, a bank spokesman said.
Still, some companies that have taken away perks are making it up to executives by boosting their pay. SunTrust Banks eliminated most executive perks in 2008, including financial planning services, club memberships and payment of taxes on the perks, according to a corporate filing. But the bank also noted that "base pay increases were made in 2008 to offset this reduction in perks."
A spokesman for SunTrust, a recipient of $4.9 billion in government funds, said in an e-mail that the bank seeks to "maintain an executive compensation framework that is competitive, appropriate and consistent with industry practice, and we periodically make adjustments in line with that goal."
Corporations have long defended perks as necessary for attracting and retaining talented executives. They also say some perks -- corporate jets and chauffeured drivers, for example -- are provided for security and to ensure that executives can work efficiently. In fact, it is not uncommon for companies to mandate that their chief executive use the corporate jet and car for all travel. American Express is one such company. Last year, it provided its chief executive, Kenneth I. Chenault, with $415,000 in corporate jet travel for personal reasons, as well as $201,000 for a home security system and $46,000 for security during personal trips.
A spokesperson for American Express declined to comment. The company's proxy statement says it eliminated tax gross-ups as of 2008.
GMAC said it had stopped using its corporate aircraft altogether after receiving a federal bailout in late 2008 and that de Molina, its chief executive, had declined a year-end bonus for 2008. He did receive a nearly $6 million award earlier in the year, however, and GMAC covered the taxes due on that bonus.
De Molina, a former executive at Bank of America who arrived at GMAC in 2007 and became its chief executive in April 2008, was "instrumental in leading the company through an incredibly challenging period and successfully executed a series of actions to stabilize the company," said Gina Proia, a company spokeswoman.
CIT, which cut its staff by 22 percent in 2008, declined to comment. Representatives for Comerica did not return phone calls.