Andrew Cecere, U.S. Bancorp chairman, president, CEO
Total compensation: $14,143,362 for the year ended Dec. 31
Nonequity incentive pay: $2,663,760
Other compensation: $44,243
Exercised stock options: $5,061,122
Value realized on vesting shares: $5,274,237
New stock options: 0
CEO pay ratio: 230:1
Median pay: $58,354
Total 2018 shareholder return: -12.4 percent
Note: The biggest change to Cecere’s 2018 compensation package was the elimination of stock options as a long-term equity-incentive award. In prior years, Cecere and executives had been granted a mix of stock options and performance-based restricted stock units (PRSUs). The board’s compensation/human resources committee did not grant stock options to Cecere or other executives last year.
But the grant-date value of Cecere’s long-term equity awards increased in 2018 in part to recognize his first full year as CEO. To compensate for eliminating options, the committee granted restricted stock units in addition to PRSUs. So the grant-date value of Cecere’s 2018 long-term equity awards were valued at $7.26 million. In 2017, Cecere was awarded long-term equity awards with a grant-date value of $6 million, which included 102,251 stock options worth $1.5 million and $4.5 million of PRSUs.
Proxy advisory firms and institutional investors are increasingly voting against pay packages that include stock options as incentive awards. In 2017, U.S. Bancorp’s shareholders gave the say-on-pay proposal, an annual nonbinding vote on executive compensation, only 74.7 percent support. It was a passing mark but a sharp drop from previous levels.
The board met with some of its largest shareholders and as a result made the decision on stock options. Shareholder support for the say-on-pay proposal at last April’s annual meeting rose to 95.5 percent.
The Star Tribune counts the realized value of long-term equity awards; under that formula Cecere’s realized pay decreased 11.3 percent in 2018, mainly because his option gains were nearly $3 million less than in 2017.