Bank of New York Mellon Corp., the world’s largest custody bank, agreed to pay $33.8 million in severance and benefits to Robert P. Kelly, who stepped down as chief executive officer Aug. 31 after a dispute with the board.
Kelly will receive a severance payment of $2 million, a pro rata bonus with a target value of $4 million, restricted stock valued at $11.2 million and a supplemental pension annuity valued at $16.6 million, BNY Mellon said today in a regulatory filing. The payments will result in a charge of $22 million in the third quarter for the New York-based bank.
Kelly, 57, left over what the bank described as “differences in approach to managing the company.” He was replaced by Gerald L. Hassell, 59, who had been president of New York-based BNY Mellon since 1998.
Kelly earned $19.4 million last year, a 38 percent increase from 2009. Most of his compensation came in stock-based awards, according to a March regulatory filing, and he received $1 million in salary.
He became the head of BNY Mellon in July 2007 after Bank of New York Co. bought Pittsburgh-based rival Mellon Financial Corp., where he had been the CEO.
BNY Mellon in July reported a 12 percent increase in second-quarter earnings as acquisitions and market gains lifted assets and fees from overseeing them. The bank had assets under custody of $26.3 trillion and $1.3 trillion under management at the end of June.
The company has declined about 34 percent this year in New York trading, compared with a drop of 22 percent for the Standard and Poor’s 500 Financials Index.