Banking executive Edward J. "Ned" Kelly III earned nearly $15 million last year in salary, bonus and other payments after PNC Financial Services Group acquired Baltimore's Mercantile Bankshares Corp., according to documents filed yesterday.
Kelly, Mercantile's former chief executive, had taken a vice chairman role at PNC after the deal was completed a year ago, but he quit in late June to join the Carlyle Group. He's now an executive at Citigroup Inc., of New York. Kelly declined to comment yesterday, through a spokeswoman.
According to PNC's proxy statement, which was filed with the Securities and Exchange Commission yesterday afternoon, Kelly's four-months work and merger-related compensation included:
$173,000 in salary
A $1.4 million bonus
$6.2 million in vested stock options
Nearly $7 million in tax reimbursements, including "gross-up payments to offset the impact of the excise tax" imposed from payments he received when Mercantile changed hands.
Kelly was the only PNC executive to receive a cash bonus last year, according to the filing.
PNC spokesman Fred Solomon said the terms of Kelly's employment agreement and compensation were set before the acquisition was finished.
"It's common for public companies to cover the excise taxes resulting from mergers," Solomon said.
When the Pittsburgh financial giant took over Mercantile, Baltimore lost a banking headquarters and several hundred jobs through layoffs. Solomon said the company still has "a very large presence in Baltimore."
Kelly also gave up his "change of control" severance agreement, commonly known as a golden parachute, before the acquisition. Mercantile has said it was worth about $6 million.