FDIC Pays Out $860,000 in Bonuses

American Banker, 2/21/03 -- The Federal Deposit Insurance Corp. gave a combined $860,000 of bonuses to 39% of its executives last year, according to figures obtained Thursday by American Banker.

The bonuses were part of the "pay at risk" program announced a year ago by Chairman Don Powell to mimic private-sector incentives.

"If you meet corporate and individual objectives, you will be rewarded; and if you don't meet corporate individual objectives, you won't," Mr. Powell said at the time.

Though each of the FDIC's 169 executives received a 3.2% raise, only 66 got bonuses. The bonuses, which ranged from 5% to 12% of base pay, were determined by how well employees met individual goals and how much they contributed to meeting corporate objectives.

Nominations were made by office or division directors and an executive review board. An FDIC spokesman said that the program is expected to be refined this year.

John F. Bovenzi, the chief operating officer and a deputy to the chairman, received the biggest bonus, $22,356. Michael Zamorski, the director of the division of supervision and consumer protection, was close behind, with $22,334.

The top five recipients also included Douglas H. Jones, the senior deputy general counsel, with $22,179, and Erica Cooper, a deputy general counsel, with $19,952. They received more than their boss, General Counsel William F. Kroener, whose bonus was $14,862.

All of the five senior executives who report directly to Mr. Powell received bonuses. In addition to Mr. Bovenzi, John Brennan, a deputy to the chairman, got $15,912, and Steve App, the chief financial officer who joined the FDIC halfway though the year, got $9,543. Jodey Arrington, Mr. Powell's chief of staff, got $14,360, and C.K. Lee, a special adviser to the chairman, got $13,347.

The bonuses came at an awkward time for the agency. As it informed executives of their awards last month, it also announced that it was eliminating approximately 140 positions. But a spokesman said those announcements were not contradictory.

The job cuts "eliminate surplus positions, positions where there isn't enough work to continue justifying the slots," he said. "The bonus program is to set up an incentive for executives to work toward meeting ambitious corporate and divisional or office objectives. Both are fair results from careful deliberation, but no tie links the two."

The last time the FDIC awarded bonuses was in 1994.

Half of the employees in the federal government's "senior executive service" received bonuses in 2001; the average bonus was nearly $8,000 each. The Federal Reserve Board pays out executive bonuses, while the Office of the Comptroller of the Currency and the Office of Thrift Supervision pay out "performance awards" of relatively low dollar value, a common practice throughout most federal agencies.

The bonuses could have a volatile effect on a voluntary cap on total compensation adopted by the FDIC, the OTS, and the OCC. The three agencies had limited total compensation to the salary of the Vice President of the United States, which this year is $198,600, but the FDIC said Thursday that it had switched to the policy of the Federal Reserve Board, which allows total compensation of as much as $215,000.

Comptroller John D. Hawke Jr. said Thursday that he would have paid his employees more but wanted to stick to the cap.

"Our senior people are unmatched anywhere in government," Mr. Hawke said. "If anyone deserved to have bonuses, it is them. But as a matter of policy, we have decided to adhere to the cap."

Listed below is the list of the executives that received a bonus.