The Federal Home Loan Bank of Seattle paid Norm Rice more than $427,000 when he stepped down as chief executive on March 15, the troubled...
The Federal Home Loan Bank of Seattle paid Norm Rice more than $427,000 when he stepped down as chief executive on March 15, the troubled bank disclosed this week in a regulatory filing.
Rice, a former Seattle mayor, left after the bank was placed under stricter regulatory scrutiny. Its problems stemmed from an expansion into buying mortgages from its member banks.
The bank also announced a decline in first-quarter earnings, and said it anticipates “a trend of net losses for 2005 and 2006.”
Although Rice’s departure was called a retirement, he received separation pay of $367,333 under a “resignation and release agreement” with the home-loan bank, according to a filing with the Securities and Exchange Commission.
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He also received about $60,000 in retirement benefits beyond what he had accrued during his six years at the bank. Rice declined his bonus for the year 2004.
Rice last year received a salary of $444,763, and a bonus of $80,621 paid for performance in 2003. Last year, the home-loan bank’s regulator told the Seattle bank and the nation’s other 11 home-loan banks to file initial registrations with the SEC by June 30, 2005.
The banks are not publicly traded. They are owned by groups of financial institutions that use their services. But their regulator wants the home-loan banks to register with the SEC because they have a public mission — to provide low-cost funding for mortgages.
“Registration will help the banks achieve a new level of financial disclosure and corporate responsibility,” said a spokesman for the Federal Housing Finance Board, which regulates the home-loan banks.
The registration means that more information about the home-loan banks, such as executive pay, will be disclosed.
The Seattle bank’s filing also disclosed severance benefits for Kelli Bono, its chief financial officer who resigned November 30 after 20 years at the bank.
Bono received a severance payment of $1,025,322 last year, including about $550,000 reflecting retirement benefits she would have accrued if she had stayed until retirement age. She also received about $59,000 to help pay the taxes on the additional retirement benefit.
Bono’s severance payment included up to $15,000 in payments to an outplacement consultant to help her find another job, as well as a bonus for 2004 performance that was not disclosed.
A third executive, Bruce Brooks, left the bank in April of this year because his position as director of corporate and community affairs was eliminated. His severance benefits include four months’ pay, totaling $90,700, and $10,000 instead of outplacement consulting.
Rice’s successor, James Gilleran, receives an annual salary of $525,000 and a bonus of up to 60 percent of that amount.
The bank said first-quarter net income was $12.3 million, down from $23 million in the first quarter 2004. It expects losses in coming quarters as it works toward a new business model.
Melissa Allison: 206-464-3312 or email@example.com