Bank rewards $4.5 million in bonuses for its CFO and top consumer banker.
In a strategic move to cut costs by $750 million over the next 12 to 18 months, Truist, one of the largest banks in the US, has launched a comprehensive strategic planning process. This process, initiated last September, has led to changes in the bank's executive compensation program.
Two key executives, CFO Mike Maguire and Chief Consumer and Small-Business Banking Officer Dontá Wilson, have received performance-based bonuses as part of these changes. The bonuses, in the form of performance share units, are designed to incentivize these executives to create shareholder value while maintaining appropriate levels of capital and managing risk effectively.
The bonuses for Maguire and Wilson are subject to Truist achieving minimum capital requirements and a modifier based on the bank's total shareholder return relative to the KBW Nasdaq Bank Index. The payout will be between 75% and 125% of the target if the minimum capital requirements have been met.
Mike Maguire, who became CFO of Truist in September 2022, received a compensation of $3.6 million last year, as stated in the bank's most recent proxy filing. Dontá Wilson, who has held his current title since last November, had a compensation of $4.7 million last year.
Truist's CEO, Bill Rogers, has reiterated the bank's commitment to keeping expenses flat this year compared to 2023, despite investments in certain areas of the business such as payments and middle-market lending.
The compensation and human capital committee at Truist decided to shift from its historical annual incentive performance award program to one that emphasizes a comprehensive evaluation of performance across multiple categories in February. This new program factors in financial measures such as adjusted earnings per share, adjusted noninterest expense, common equity tier 1 capital ratio, adjusted net income to common shareholders, and efficiency ratio. It also includes non-financial strategic priority categories such as "Simplify and Optimize Resources and Controls," and "Winning Behaviors."
It is important to note that, based on available information, Truist's executive compensation changes are not publicly disclosed as being related to its strategic planning process or the sale of Truist Insurance Holdings.
Despite these changes, Truist has experienced some leadership changes over the past year. The chief information officer, chief audit officer, and chief marketing officer have left the bank. Recently, Allison Robinson, the head of branch and premier banking at Truist, also left the company after more than two decades with BB&T and then Truist.
In conclusion, Truist's strategic planning process and cost-cutting efforts are driving changes in its executive compensation program. The bank is focusing on performance-based bonuses to incentivize its executives to create shareholder value while managing risk effectively. However, the specific link between these changes and the sale of Truist Insurance Holdings, or any changes in executive compensation related to this event, is not publicly disclosed.
- The performance-based bonuses for CFO Mike Maguire and Chief Consumer and Small-Business Banking Officer Dontá Wilson are designed to encourage them to invest wisely in the bank's business, aiming to increase shareholder value while maintaining financial stability.
- Truist's new executive compensation program, which evaluates performance across multiple financial and strategic priority categories, demonstrates the bank's commitment to efficient and effective finance management as part of its overall strategic planning process.
