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MBNA CEO's payout to top $125M
Report: Bruce Hammonds cut perks at the credit card giant. He'll cash in when BofA deal closes.
July 5, 2005: 8:02 AM EDT

NEW YORK (CNN/Money) - It's been quite a topsy-turvy month for Bruce Hammonds, the chief executive of credit card giant MBNA Corp. He survived a harrowing helicopter crash in Manhattan's East River. He brokered MBNA's $35 billion sale to Bank of America Corp. and kept a job for himself as head of the combined company's credit card division.

And now, according to Tuesday's edition of The Wall Street Journal, the 57-year-old is entitled to pocket more than $125 million once the Bank of America-MBNA deal becomes official.

The bulk of the money due Hammonds is in the form of restricted stock and stock options that can be exercised in the event of a change of control, which is what will happen to MBNA (Research) once Bank of America receives the regulatory and shareholder approvals it needs to close the deal, as early as the fourth quarter of this year.

Once complete, Bank of America (Research) will become the country's largest credit card issuer.

At first glance, the generous payout to Hammonds seems incongruous. Since taking the helm at MBNA at the end of 2003, Hammonds cut corporate perks. The Journal reported that Hammonds froze executive salaries and reduced stock awards, sold the corporate golf course, and promised a "less flamboyant" look for the company.

Turns out, Hammonds' reputation for belt-tightening and his looming $125 million payday aren't necessarily inconsistent.

Hammonds, a part of the management team that started the company in 1982, received large amounts of restricted stock at a time when he was not CEO and MBNA was known among corporate governance advocates to be overly generous with its executive compensation.

The stock grants had a 10-year vesting period and stipulated that they would vest immediately upon a change of control at the company, according to the Journal.

Hammonds held $56 million worth of restricted stock at year-end 2004, the newspaper reports. Stock options make up most of the remainder of his compensation and can be sold once the Bank of America deal becomes final.

In 2004, Hammonds earned salary and bonus of $3.5 million, down from $4.6 million the year before.

Hammonds, through a spokesman, declined the Journal's request for comment.

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Chief Executive Officers
Corporate Governance
MBNA Corporation
Bank of America Corporation
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