Discover Financial Services paid CEO David Nelms nearly $10 million in cash and stock in 2012, a year in which the Riverwoods-based credit card company exceeded its profit goals by 49 percent.
Mr. Nelms' overall compensation in a record year for the company actually decreased from 2011, when he made $13.9 million in stock and cash, according to a proxy statement filed today with the Securities and Exchange Commission.
The primary difference came in stock awards. Mr. Nelms' stock package, based mainly on long-term performance achievements, totaled $5.8 million in 2012 vs. $9.6 million in 2011.
His salary of $1 million was unchanged, and his cash-based incentive plan compensation was nearly the same at $3.1 million, compared with $3.2 million the year before.
The board has agreed to overhaul executive compensation in 2013 to allow for “clawbacks” of already-granted stock awards if Discover's corporate risk officer determines that an executive took on excessive risk in achieving goals.
In addition, the CEO now must own shares worth at least seven times his or her base salary.
Discover's 2012 net income of $2.3 billion was the highest in its history and easily beat the board's goal for the year of $1.6 billion, the proxy stated.
The board also cited the creation of a mortgage lending platform through the acquisition of Home Loan Center Inc. and growth in both credit card loans and payment volume.
Mr. Nelms is in the midst of executing a plan to transform Discover from just a credit card and payments company to a broader consumer lending firm focused on mortgages, student loans and deposit products.
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