Top officials at Busey awarded bonuses
CHAMPAIGN — Will First Busey Corp.'s improving performance be enough to secure raises for its top executives?
The holding company for Busey Bank will make that determination mid-year, according to a proxy statement the company recently filed with the Securities and Exchange Commission.
But it's clear First Busey has already turned on the taps when it comes to paying bonuses to those executives.
After deciding last year not to pay bonuses in 2013 for performance in 2012, the Champaign-based company awarded hefty bonuses this year to its president and CEO as well as to four lieutenants.
That boosted President and CEO Van Dukeman's total compensation for 2013 to nearly $1 million. The $969,407 in total compensation included:
— $530,433 in salary.
— A $264,000 bonus.
— $125,000 in stock awards.
— $49,974 in other compensation.
The five so-called "named executive officers" took a 5 percent salary cut last year and received no bonuses for 2012, based on the recommendation of senior management. Prior to that, the last time they had a salary change was July 1, 2011.
As a result of the salary cut, which took effect April 1, 2013, Dukeman's salary was trimmed from $550,000 to $522,500; and three other executives saw their salary drop from $275,000 to $261,250 — exactly half of Dukeman's.
Those executives included: Robert F. Plecki Jr., First Busey's chief operating officer and chief credit officer: David B. White, First Busey's soon-to-retire chief financial officer; and Christopher M. Shroyer, president and CEO of Busey Bank.
The fifth named executive officer — General Counsel John J. Powers — saw his salary drop from $237,000 to $225,150.
According to the proxy statement, the salary reductions "helped to set the appropriate tone" for the company by demonstrating the executives' "personal commitment and accountability to First Busey's expense control initiatives."
Cost cutting did contribute to First Busey's earnings increase during the first quarter this year. The amount spent on the company's salaries, wages and benefits was $15.1 million during the first three months of 2014, down from $16.8 million during the same months in 2013.
In restoring bonuses for top executives this year, the company's compensation committee considered six factors: earnings per share, total stock return relative to other banks in First Busey's peer group, return on average assets, operating expense, margin growth and non-interest income.
The lion's share of the bonuses came from two achievements: namely, earnings of 29 cents per share in 2013, up from the target of 24 cents; and a return on average assets of 0.71 percent, up from the target of 0.58 percent.
The bonuses for both Plecki and Shroyer were $110,000; the bonus for White was $100,000; and the bonus for Powers was $94,000. In 2013, Dukeman was eligible to receive a bonus up to 60 percent of his salary, while the other named officers could receive up to 50 percent of their salaries.
Total compensation for both Plecki and Shroyer in 2013 amounted to $479,706. Total compensation for White was $484,756; Powers, $419,911.
First Busey shareholders will get a chance to express their opinions on the compensation packages at the company's annual meeting, scheduled for 3 p.m. May 21 at the Urbana Country Club. During the meeting, shareholders will be asked to approve the packages in a nonbinding, advisory vote.
Shareholders will also be asked to elect 11 directors to the First Busey board. The board is asking that another one-year term be given to all current directors, including University of Illinois Chancellor Phyllis Wise, who was appointed to the board earlier this year.
Other board members include: Dukeman; First Busey Chairman Gregory B. Lykins; Midwest Television Chairman August C. Meyer Jr.; George T. Shapland, president of Shapland Management Co.; David J. Downey, president of The Downey Group; Horizon Hobby President and CEO Joseph M. Ambrose; Urbana attorney E. Phillips Knox; Carter's Furniture Chairman V.B. Leister Jr.; Sloan Implement CEO Thomas G. Sloan; and Stephen V. King, founding partner of the Prairie Capital private-equity firm.
Both Shapland and Downey also serve on the board of directors of The News-Gazette Inc.
Most of the First Busey directors received between $31,588 and $36,088 in compensation during 2013, with roughly two-thirds of that coming in cash and about one-third in the form of stock awards.
Two exceptions were Wise, who was not on the board in 2013 and thus received no compensation, and Dukeman, who got no additional compensation.
The third exception was Lykins, who as chairman received salary payments of $192,885 in 2013; an $80,000 bonus in March 2014 for performance in 2013; and $61,789 in other compensation. Effective April 1, 2013, Lykins' annual salary was $190,000, a 5 percent reduction from his 2012 salary.
The proxy statement also identified all beneficial owners holding more than 5 percent of First Busey common stock. They included:
— Boston-based Wellington Management, with a 9.9 percent share.
— Chicago-based Columbia Wanger Asset Management, with a 9.2 percent share.
— Elisabeth M. Kimmel, daughter of August C. Meyer Jr., with an 8.4 percent share.
— New York-based Blackrock Inc., with a 5.2 percent share.
— Norwalk, Conn.-based Thomson, Horstmann & Bryant Inc., with a 5 percent share.
Two members of First Busey's board of directors each were beneficial owners of more than 1 percent of First Busey common stock. Lykins beneficially owned 4.7 percent of outstanding shares, including those in Meyer-related trusts for which Lykins serves as trustee. Shapland was the beneficial owner of 1.3 percent of First Busey shares.
Shareholders get increased dividend
First Busey Corp. recently increased its cash dividend to shareholders for the first time in several years.
The parent company of Busey Bank announced that "due to strong financial performance," it would increase its quarterly dividend from 4 cents per common share to 5 cents per common share — an increase of 25 percent. That 5 cents-per-share dividend was paid April 25 to stockholders of record as of April 18.
First Busey also reported that net income for the first quarter of this year was $7.9 million, up from $6.4 million for the first quarter of 2013. That was a nearly 23 percent increase. Meanwhile, the amount of net income available to common stockholders went up by 39 percent.
In a letter to shareholders, First Busey President and CEO Van Dukeman cited three major factors for the growth in net income:
— First was a reduction in preferred dividends. Loan growth in 2013 pushed up the bank's Small Business Lending Fund credits, reducing the cost of the bank's preferred stock dividend this year. As a result, First Busey had to pay only $182,000 in preferred stock dividends during the first quarter, compared with $908,000 during the first quarter of 2013.
— Second was a drop in credit costs. Problem loans continued to decline by virtually every measure, allowing the company to slice its provision for loan losses by half — $1 million in the first quarter of this year, compared with $2 million in the first quarter of 2013.
— Third was a decline in operating expenses. Noninterest expenses dropped from $29.6 million in the first quarter of 2013 to $26.6 million in the first quarter of this year. During the same time, the company increased the revenue it got from trust fees, remittance processing fees and commissions and brokers' fees.
During the first quarter of this year, one of First Busey's subsidiaries — FirsTech, a retail payment processor — had the highest quarterly income it has had in 10 quarters.
Another First Busey subsidiary, Busey Wealth Management, and Trevett Capital Partners, a wealth management division of Busey Bank, saw quarterly revenues grow by double-digit percentages from the first quarter of 2013.
In his letter to shareholders, Dukeman also noted that First Busey has been chosen by Forbes as one of "America's 50 Most Trustworthy Financial Companies" for 2014. It was selected for its transparency from a base of more than 8,000 companies traded on U.S. exchanges.