Wells Fargo (NYSE:WFC) Awards Stock Bonuses Worth $25 Million to Top Executives

Wells Fargo (NYSE:WFC) announced on Thursday that its top four executives would receive stock bonuses worth approximately $25 million, although they were quick to add that no cash bonuses would be paid out for 2009.

Chief Executive Office John Stumpf was given 379,600 shares, which will bring him $10 million at today’s share price. The other top three executives at the company, Chief Financial Officer Howard Atkins, home and consumer finance head Mark Oman and wholesale banking head Dave Hoyt were all given 189,800 shares, which totaled close to $5 million each in value.

The awarding of the shares came with the stipulation there would have to be certain performance goals met after a three-year period before the shares would be vested, along with the forfeiture of the shares if any of the executives left during that time to work for the competition. The execs would also have to hold a number of the shares while they worked for the company, said Wells Fargo in a statement.

Chair Steve Sanger, of the Human Resource Committee of Wells board of directors, said the reason for giving the shares to the company leaders was to give them incentive to remain at the bank while they continue to work to integrate Wachovia into the company after acquiring them. The company also seeks continuity in leadership while they navigate through the ongoing recession.

“Given the current challenges impacting the banking industry, Wells Fargo executives, at all levels, are being increasingly and aggressively recruited by competitors,” Sanger said. “Retaining them, along with our entire senior management team, is clearly in the best interest of our Company and its shareholders.”

This is all in response to – whether warranted or not – the bailouts the received by huge financial institutions during the mortgage meltdown and deep recession, which still continues.

While it’s not certain banking pay and bonuses had a direct impact on risky behavior by some in the industry, that is what is being proffered by mainstream media, and a lot of people are looking at executive pay at banks during this time as a point to vent their anger.

People understand cash and pay, so offering restricted stock shares is a good way to deflect a lot of criticism, as people don’t quite understand that in the way they do with straight cash deals.

This is of course why Wells Fargo and others wanted to pay back the TARP funds they received as soon as possible, as the large banks are under pressure concerning their top people as headhunters seek them out on behalf of their competitors, the reason they’re tying up their top people with deals like these.