NEW YORK (AP) â€” The CEO hired to help E-Trade Financial Corp. weather the financial meltdown was given a pay package worth $4 million last year, according to an Associated Press analysis of a regulatory filing.
The pay reflects terms Donald Layton agreed to after he was named chief executive in March 2008. The appointment came at a time when the online brokerage was struggling to extricate itself from the steep investment losses from the subprime mortgage meltdown.
Layton, a former JPMorgan Chase & Co. vice chairman, had agreed to serve through 2009 for a base salary of $1 million and no bonus or new stock and options.
In his first year as CEO, however, Layton was given a pay package worth $16.5 million. The bulk of that came from $15.7 million in stock and options.
Although he received no new equity awards last year, E-Trade said it decided to pay Layton an extra $3 million in light of his leadership and retirement. E-Trade said in a regulatory filing that the compensation was for Layton's successful efforts to raise capital and restructure some of the company's debt.
In the final quarter of 2009, E-Trade said a reduction in loan loss provisions helped narrow its loss. The company lost $67.1 million, or 4 cents per share, compared with a loss of $275.6 million, or 50 cents per share, in the same period a year earlier.
For all of 2009, E-Trade lost $1.3 billion, or $1.18 per share.
Last month, the company appointed former Citigroup executive Steven Freiberg as its new CEO. He replaced Robert Druskin, who had been acting as interim CEO since the end of last year for a base salary of $300,000 a month.
Layton, meanwhile, was named by the Treasury Department last week to the board of troubled insurance giant American International Group Inc., which is working to repay a government bailout package of $182 billion.
The Associated Press formula is designed to isolate the value the company's board placed on the executive's total compensation package during the last fiscal year. It includes salary, bonus, performance-related bonuses, perks, above-market returns on deferred compensation and the estimated value 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 Securities and Exchange Commission, which reflect the size of the accounting charge taken for the executive's compensation in the previous fiscal year