The chief executive of Waterbury-based Webster Financial Corp. earned a pay package of $2.4 million in 2013 but saw a sharp decline in a cash bonus tied to the bank's financial performance, a shareholder proxy filed Friday shows.
Chairman and Chief Executive Officer James C. Smith's package included a salary of $879,800, a cash incentive payment of $792,000 tied to performance goals, and other compensation — including contributions to retirement plans — of $709,416.
In addition to the package, Smith was granted stock options now valued at $1.3 million and restricted stock valued at $1.1million. The value of those grants could rise and fall depending on the performance of Webster shares. The restricted shares will not vest for three years and they are dependent on Smith meeting certain future performance goals.
In 2013, Smith's package was roughly a third of the $6.5 million in 2012, primarily because his compensation in 2012 included $3.7 million in previously granted, vested shares of restricted Webster stock. In 2013, Smith did not realize value from the vesting of restricted shares, and he did not exercise any stock options.
But Smith's 2013 package also was affected by a lower cash incentive payment, which fell 25 percent from $1 million in 2012.
In the proxy, the compensation committee praised Smith's performance, pointing to achievements such as record core revenues and improved credit quality. But the committee also noted the bank did not meet four of five financial goals, including meeting expense control targets and two key measures of profitability.
For all of 2013, net income was $168.7 million, $1.90 a diluted share, compared with $171.2 million, or $1.96 a diluted share, in 2012.
Last year, Webster shares rose from $21.25 on Jan. 2 to a high of $31.38 on Dec. 31. A $100 investment in Webster shares at the start of 2013 was worth $155.11 by year's end, assuming all dividends were reinvested. Webster shares far outperformed a similar investment in the S&P 400 Financial Index, which was worth $125.07.
Friday, Webster shares closed at $31.25, up 14 cents on the New York Stock Exchange.
The Courant calculates compensation as the sum of salary, bonus, value exercised from stock options and vested stock awards, plus other forms of direct pay, such as incentive payments and personal use of corporate aircraft. These calculations do not include change in pension values or nonqualified deferred compensation earnings, which are also disclosed in the proxy.
The pay packages for other top Webster executives in 2013 were:
—Glenn I. MacInnes, chief financial officer: $679,325, plus stock options and restricted shares now valued at $542,830.
—Joseph J. Savage, president: $747,143, plus options and restricted shares now valued at $475,302. Savage was appointed president Jan. 1.
—Daniel M. Fitzpatrick, private banking chief: $620,589, plus options and restricted shares now valued at $281,990.
—Nitin J. Mhatre, community banking chief: $510,494, plus options and restricted shares now valued at $320,399.