Riverwoods-based Discover gave Mr. Nelms a 112 percent raise over 2012, when he collected $10 million in cash and stock. The vast majority of his 2013 compensation was in stock grants that vest five years from now.
The hefty grant will make Mr. Nelms one of the highest-paid Chicago-area CEOs, at least for one year.
In its proxy statement, which the company filed today, Discover's board noted that Mr. Nelms, 53, doesn't have an employment agreement and becomes eligible for retirement in 2016. The board's compensation committee, chaired by London-based Aon PLC CEO Gregory Case, made a special grant of 200,000 restricted stock units to Mr. Nelms.
That stock won't be available to him if he retires before the vesting date of Dec. 31, 2018, but would vest immediately if the company were acquired and Mr. Nelms departed.
'PROMOTE STABILITY'
“The committee determined it (is) in the best interest of the company and its shareholders to create additional long-term alignment and to promote stability in the company's leadership,” the proxy says.
Overall, Mr. Nelms collected $1 million in salary, nearly $2 million in cash incentive pay and $18.2 million in stock awards.
Discover has performed well in recent years under his leadership. Last year, its stock generated a 42 percent total return.
The company posted record net income of $2.47 billion, 43 percent above the board's plan target of $1.73 billion. Total loans grew 5 percent at a time when growth has been hard to come by in the credit-card industry. Loan losses were the lowest in Discover's 27-year history, according to the proxy.
Mr. Nelms also has moved to diversify Discover by acquiring or launching businesses making student loans, mortgages and home-equity loans.
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