NEW YORK (AP) - Gerald L. Baker, president and chief executive of First Horizon National Corp., received compensation valued at about $3 million in fiscal 2007, according to a regulatory filing Friday.
Baker, who was promoted to president and CEO from chief operating officer on Jan. 29, 2007, was awarded $790,731 in base salary. He also received stock and option awards valued at $2.1 million on the days they were granted. The company noted in the filing that Baker forfeited a portion of his equity-based awards during the year.
Additionally, the Memphis-based bank awarded Baker $52,362 in all other compensation, which included perquisites and other personal benefits, 401(k) plan matching contributions and life insurance premiums.
The AP's total pay calculations include executives' salaries, bonuses, incentives, perks, above-market returns on deferred compensation and the estimated values of stock options and awards granted during the year. The calculations don't include changes in the present value of pension benefits, and they sometimes differ from the totals companies list in the summary compensation table of proxy statements filed with the U.S. Securities and Exchange Commission.
First Horizon's former chairman and CEO, J. Kenneth Glass, resigned in January 2007 and announced he would retire as an employee later in the year. The compensation committee determined that it would be appropriate to continue his former salary as an incentive to work with Baker and new Chairman Michael D. Rose to ensure a smooth transition. According to AP calculations, Glass received compensation valued at about $1 million in 2007.
According to First Horizon's proxy filing, the company is committed to paying for results, and large portions of executive compensation are linked to company performance. First Horizon's compensation committee annually reviews the compensation practices of a peer group of financial institutions that includes National City Corp., Zions Bancorp, M&T Bank Corp. and Mellon Financial Corp.
Last year company performance did not meet threshold requirements, First Horizon said, so zero executive cash bonuses were paid.
The regional bank swung to a loss in the fourth quarter due to rising loan-loss reserves, a reduction in the value of mortgage servicing rights and charges stemming from an earnings enhancement plan.
Like most other banks, First Horizon ramped up its loss provisions in recent quarters because of rising delinquencies and defaults among mortgages and consumer loans.
For the full year, First Horizon posted a loss of $170.1 million, or $1.35 per share, compared to 2006 earnings of $462.9 million, or $3.62 per share.
Late last month, the company said it will cease originating home builder and commercial real estate loans nationally in an attempt to reduce its national real estate exposure and focus on growing in its local area.
Instead First Horizon will continue to offer the loans through its banking unit, First Tennessee Bank, primarily in Tennessee and the Southeast. First Horizon is aiming to reduce its national real estate portfolio exposure by $2 billion this year. Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.