Top executives at U.S. Bancorp on Monday sent a message to the rest of the beleaguered bank industry: It pays to repay Uncle Sam.

Four months after the Minneapolis bank repaid $6.6 billion in taxpayer money to the U.S. Treasury Department, and while other banks are seeing their executive compensation slashed by the government, the bank's board of directors restored cash bonuses and options to its two top executives, according to a filing with the U.S. Securities and Exchange commission late Monday.

Chief Executive Officer Richard Davis will receive a $1.26 million bonus plus options to purchase 305,625 shares of stock at $25.35 each, plus 98,619 shares in restricted stock units -- a payout he declined in January. Andy Cecere, chief financial officer, will get a $525,000 bonus, plus options to buy 183,374 shares and 59,172 units.

The stock closed Monday at $24.15, down 3 percent.

Spokesman Steve Dale said the executives' initial decision to reject the bonuses was personal and was "based on the overall uncertainty with the financial services market at the time." He said the bank's board reinstated the payouts for competitive reasons.

The board's decision may reflect how much U.S. Bancorp's fortunes have changed since early this year. The stock hit a 14-year low of $8.06 a share in March. But since then the federal government said the bank was strong enough to repay its bailout money and the bank has posted stronger earnings, including a 4.5 percent gain in the third quarter.

In repaying the bailout, U.S. Bancorp has managed to avert a clash with the federal government's so-called pay czar. Kenneth Feinberg, U.S. Treasury's special master for compensation, slashed pay at seven companies, including New York-based insurance giant AIG, Citigroup and Bank of America, all of which got "exceptional" aid from the Treasury's $700 billion rescue fund.

Yet, the decision to reinstate top executive bonuses and options may not play well with U.S. Bancorp shareholders, whose quarterly dividend this year was cut to a mere 5 cents a share from 42.5 cents because the bank said it needed to conserve cash. The cut was a sore point at the U.S. Bancorp shareholders meeting this spring, where a number of older shareholders demanded to know when the dividend would be restored.

In a conference call with analysts last week, Davis said the bank would reexamine the dividend in December.

"The dividend is an important step in our shareholder focus," he said.

Chris Serres • 612-673-4308