CIT Group Inc., the lender that struck a deal to buy Steven T. Mnuchin’s OneWest Bank, said the executive will be awarded an annual target compensation package of $4.5 million.
Mnuchin, chairman of OneWest’s parent IMB Holdco LLC, will get a salary of at least $750,000 and bonuses contingent on the company’s performance, New York-based CIT said yesterday in a regulatory filing. Mnuchin, 51, will become CIT’s vice chairman and join the board of the combined company, according to the acquisition announcement.
CIT said July 22 that it would acquire Pasadena, California-based OneWest for $3.4 billion in a deal that combines two casualties of the financial crisis and brings Mnuchin together with John Thain, his former colleague at Goldman Sachs Group Inc. Thain, chief executive officer of CIT, said he will count on OneWest managers because the companies have different areas of focus.
“The management teams actually are quite additive,” Thain said on a conference call after the deal was announced. Until the deal is completed, “we don’t have branches, we don’t have much of a West Coast presence.”
CIT rose 0.6 percent to $49.14 at the close of trading yesterday in New York. It has decreased 5.7 percent this year.
Joseph Otting, OneWest’s CEO who will join CIT Bank as co-president, was awarded annual pay of $4.5 million in addition to $12.5 million in total restricted stock, according to the filing. Nelson Chai, 49, the other co-president, was awarded $5 million in restricted stock.
CIT filed for bankruptcy in 2009 after losses on subprime mortgages led to a $2.33 billion U.S. bailout that was never repaid. OneWest, formerly known as IndyMac, collapsed in 2008 in the second-largest U.S. commercial bank failure on record.
OneWest, backed by billionaires John Paulson and George Soros, hired Goldman Sachs this year to find a buyer while it also prepared for a possible initial public offering.