Wells Fargo & Co. on Monday said it awarded Chief Executive Dick Kovacevich a $7 million bonus for 2005, when the fifth-largest U.S. bank’s profit rose 9 percent.
In a regulatory filing, San Francisco-based Wells Fargo also said it awarded Kovacevich a $995,000 base salary and options to buy 903,230 shares at $64.49 each. The bonus fell 7 percent from $7.5 million for each of the two prior years.
Wells Fargo also granted Kovacevich’s request to cancel an agreement under which he would receive severance payments and benefits if he were terminated for a reason other than cause, or if his duties were substantially reduced and he resigned as a result.
Kovacevich is expected to retire in 2008. He is entitled to severance under a separate agreement, Wells Fargo said.
The bank did not in the filing disclose Kovacevich’s total compensation for 2005. Spokeswoman Julia Tunis said Wells Fargo expects in mid-March to file its proxy statement, in which it usually discloses compensation for top executives.
Wells Fargo awarded Kovacevich $29.7 million for 2004. Citigroup Inc., the largest U.S. bank, awarded Chief Executive Charles Prince $23 million in compensation for 2005.
Last year, Wells Fargo net income increased to a record $7.67 billion, or $4.50 per share. Revenue rose 10 percent to $32.95 billion, helped by growth in deposits and lending, including home mortgages. The bank is the No. 2 U.S. mortgage lender after Countrywide Financial Corp.
Kovacevich has a supporter in billionaire Warren Buffett.
On Saturday, Buffett said his Berkshire Hathaway Inc. insurance and investment company at year end held 5.7 percent of the bank’s shares, worth $5.98 billion. That’s up from 3.3 percent, or $3.51 billion, a year earlier.
In his annual letter to Berkshire shareholders, Buffett called Wells Fargo “a company that Dick Kovacevich runs brilliantly.”
Wells Fargo also disclosed several other executive awards Monday.
Among them, Chief Operating Officer John Stumpf, considered a possible successor to Kovacevich, was awarded a $700,000 salary, $4 million bonus and 387,100 stock options. Chief Financial Officer Howard Atkins received a $600,000 salary, $3 million bonus and 290,330 stock options.
