Yet another TARP beneficiary…

February 26, 2009

It’s almost become akin to shooting fish in a barrel: find a TARP recipient — there’s over 400 of them now according to the latest report from Treasury — and then troll through their recent SEC filings to see how at least some of that money was spent on enriching an executive (or two). It’s so common that even the Dilbert comic strip pokes at the phenomenon.

Last night, I was looking at the preliminary proxy filed by TCF Financial (TCB), which paid $4.4 million in “all other compensation” to former CEO Lynn Nagorske. A separate chart notes that the bulk of that — $4.1 million — was for a separation payment for Nagorske, the former CEO who left on Aug. 6 after 2 1/2 years in the top job.

Judging by both the stock chart and the press release announcing the departure, Nagorske didn’t exactly do a great job. After all, Bill Cooper, the man that Nagorske replaced at the beginning of 2006, was brought back in.

When it filed Nagorske’s separation agreement with the SEC back in August, the amount of money was never spelled out. So yesterday’s filing is really the first disclosure. Keep in mind that on Nov. 14, TCF accepted $361 million in TARP money from the government.

Now I know that banks say that the TARP money is separate. And to be fair, while the disclosure was recent, the money appears to have been handed out several months before the bank took TARP funds. But in the end, money is inherently fungible and at the very least, it doesn’t look good to be handing out money with one hand and taking taxpayer help with the other.

Image Source: Minneapolis Collection

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