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Executives at some of the state’s biggest banks, including Memphis-based First Horizon National Corp., are cashing in with higher paychecks in the midst of one of the worst banking crises in U.S. history, according to recent regulatory filings.

A Tennessean analysis of pay packages shows that many banks are beefing up salaries and awarding stock to executives — shares that can be redeemed for cash within as little as a year.

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First Horizon, parent of First Tennessee Bank, lost $269.8 million last year, but its top executives received $7.7 million more in 2009 than in 2008.

Critics say too many bank executives are benefiting — perhaps even being rewarded — for past failures, even as taxpayers fund an unprecedented $700 billion federal bailout of the financial system.

First Horizon, parent of First Tennessee Bank, lost $269.8 million last year for shareholders, the third straight year of losses, and it received $866 million in federal aid.

But top executives at First Horizon received $7.7 million more in compensation in 2009 than they did the year before.

“So much for pay-for-performance,” said Mark Brooks, Nashville-based senior national researcher for the Utilities Workers Union of America, part of a group of unions filing shareholder resolutions trying to limit bankers’ pay.

Brooks thinks banks are ignoring the interests of shareholders and taxpayers, who have essentially become stakeholders of banks that received federal money.

“The taxpayers have invested a great deal in this company,” he said. “This is not just a private company anymore.”

First Tennessee insists it’s simply trying to stay competitive. A senior vice president in charge of human resources for First Horizon, Ken Bottoms, said competitors are giving their executives similar levels of pay and “we have to do what our competitors do.”

Plus, there’s a chance executives will have to give back some of their compensation from 2009, based on the new federal rules. The impact remains unknown and will depend on when a bank pays back the federal government for aid, Bottoms said.

Bottoms said First Horizon’s losses are a direct result of bad loans that prior management had made in previous years.

Current CEO Bryan Jordan, who made an estimated $5 million in 2009, up from $1.7 million the year before, had been the bank’s chief financial officer and then got a promotion to CEO in 2008. Before 2007, he had been the chief financial officer at Birmingham, Ala.-based Regions Bank.

“The current management team is saddled with having to deal with these old issues,” Bottoms said. “But at the same time, we have to make sure the bank is operating efficiently and competing with other banks.”

That doesn’t sit well with shareholder Mike Meyerrose. He plans to attend the company’s annual shareholder meeting April 20 to protest.

Meyerrose is married to former First Horizon executive Sarah Meyerrose, who lost her job in 2008. He said he jointly owns 50,000 shares with his wife from her employment there.

“I haven’t seen any regard for the shareholders,” he said. “How can you justify (that pay) if you’re not making money?”

The other aspect of the bank’s pay that irks Meyerrose and Brooks is that the First Horizon executives will be paid in stock units to boost their pay this year. Instead of cash bonuses, which are forbidden, they will receive stock units that will be redeemable in cash in 2011.

Unlike stock options, which give employees the right to buy stock at a certain price from the company, these executives just get paid in cash for whatever the stock is worth on the open market next year.

Unless the company goes bankrupt, the stock will be worth something.

Bank of America is paying top executives in a similar manner. It boosted total compensation by one third for Brian Moynihan, now chief executive officer who previously served top roles in banking and global wealth management at the bank. His compensation rose to $6.5 million in 2009.

Chief financial officer Joe Price saw his total estimated compensation rise by 50 percent to $6 million last year — mostly because of stock to be paid in cash. The company explained the pay packages are competitive with similar-sized banks and will require the executives to be paid over time.

Just like at First Horizon, the actual value of shares will vary based on future stock prices. Bank of America will pay out the salary stock units over three years beginning with January 2010.

Regions Bank has announced plans to pay executives in a similar manner, although exact compensation figures haven’t been published yet.

Bank of America paid back its federal government aid late last year with interest. Other banks are continuing to pay interest on the federal aid, which amounts to a sort of loan from taxpayers.

The banks aren’t violating federal rules by paying in stock. In fact, Bank of America’s pay package got the OK from President Obama’s pay czar Ken Feinberg, a fact that may have led the other banks to follow suit.

Feinberg said at a recent conference on executive pay at Vanderbilt University that he favors salary and long-term restricted stock paid over time as a way to rein in undue risk at banks. The reasoning goes: If bankers got shorter-term incentives, they’d be more likely to take too many chances that could risk hurting the bank and the economy.

Some boards decided not to boost the overall pay of top executives, particularly if the bank wasn’t making money.

SunTrust is paying its top executives about what they made in 2008, plus restricted stock that vests over a period of three years or more. Overall compensation for SunTrust’s top executives has actually fallen. SunTrust Banks’ bottom line bled $1.6 billion last year.

E-mail banking and finance reporter Naomi Snyder at nsnyder@tennessean.com.

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