U.S. Bancorp chairman, president, CEO
Total compensation: $13,653,161 for the year ended Dec. 31
Nonequity incentive pay: $2,718,900
Other compensation: $52,503
Exercised stock options: $4,985,049
Value realized on vesting shares: $4,696,709
CEO pay ratio: 269:1
Median pay: $69,775
Total 2018 shareholder return: 32.6%
Notes: Cecere, who became U.S. Bancorp’s top executive in June 2017, took home $13.6 million last year, down from $14.1 million in 2018 because he exercised fewer stock options. His base salary rose 9% to $1.2 million and long-term incentives also rose. The company, which runs U.S. Bank, the nation’s fifth-largest, saw its shares rise nearly 30% in 2019 amid record revenue. Its full-year profit fell 2.5% as interest rates dropped in the second half of the year.
The Star Tribune counts the realized value of long-term equity awards, not the incentives that were granted but unrealized. U.S. Bancorp and many firms incorporate unrealized grants into calculations that affect pay ratios and other comparisons. Under the company’s accounting, Cecere received $18.8 million in total compensation in 2019.
U.S. Bancorp in 2018 eliminated stock options as a long-term equity-incentive award. Before then, Cecere and executives had been granted a mix of stock options and performance-based restricted stock units (PRSUs), which are tied to the company’s return on equity. The board’s compensation and human resources committee did not grant stock options to Cecere or other executives in 2018 or 2019.
Instead of options, the top executives are granted restricted stock units in addition to PRSUs. And in 2018, it stretched the performance period for PRSUs from one year to three years. In its proxy statement, U.S. Bancorp said the structure means that “executives are not rewarded for poor performance simply because members of our financial peer group have even worse performance, nor are they rewarded for exceeding expectations if performance relative to peers is substandard.”
The grant-date value of Cecere’s 2019 long-term equity awards was $8.1 million. In 2018, Cecere was given long-term equity awards with a grant-date value of $7.26 million.
Evan Ramstad • 612-673-4241