The Bank of New York Mellon Corporation BK disclosed an increased pay package of $11.7 million for its Chief Executive Officer (CEO) Gerald Hassell in a regulatory filing on Friday. This move will rattle the San Francisco-based investment manager Marcato Capital Management, which recently criticized BNY Mellon’s leadership for the weakening performance of the company.
Compensation Awarded
Hassell, also the chairman of BNY Mellon, received an unchanged base salary of $1 million. However, his salary for 2014 reflected a year-over-year rise of over 23% on the back of additional stock awards and pension.
Stock awards of $7.8 million were remunerated to him compared with $4.7 million in 2013. Moreover, the sum granted to him as change in pension value and non-qualified deferred compensation earnings as well as other compensations totaled $1.7 million, considerably higher than the previous year’s amount of $0.28 million.
Nonetheless, similar to 2013, no option awards and bonus were given to Hassell.
Investors' Disapproval
Marcato, one of the leading investors in BNY Mellon, released a letter as well as presentation early last week and emphasized on the need for new management to help the bank realize its potential. The 1.6% stakeholder in the bank called for a change in management beginning with the exit of the CEO to initiate a growth turnaround.
BNY Mellon’s lagging performance as well as unsuccessful guidance about future development and expense saving initiatives was highlighted through comparison with other custodian banks like State Street Corp. STT and JPMorgan Chase & Co. JPM.
Our Take
Despite disapproval from certain investors, BNY Mellon supported its executive officer by claiming that the CEO has augmented shareholder value, lowered costs and improved profit margins during his tenure.
Currently, BNY Mellon carries a Zacks Rank #3 (Hold). A better-ranked bank in the same space includes Northern Trust Corp. NTRS, which holds a Zacks Rank #2 (Buy).
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