Discover: Execs won't get cash bonus while under TARP

Discover Financial Services, the credit-card company that took $1.3 billion from the Treasury’s bank-rescue fund, said its top five executives won’t receive cash bonuses while the company has government money.

Base salaries were augmented by the award of restricted shares, the Riverwoods-based lender said today in a filing. The shares cannot be sold until the company exits the bailout program, or in annual installments starting June 30, 2011, whichever comes later, the company said.

Executives won’t receive a cash bonus “during the time period in which such compensation is prohibited due to the company’s participation in the TARP,” Discover said.

Financial companies have altered compensation policies amid public outcry over pay at firms taking taxpayer funds. Goldman Sachs Group Inc. said yesterday it will pay its top 30 executives in restricted stock they can’t sell for five years.

Discover’s Chief Executive Officer David Nelms will be paid $1 million in cash and $3.6 million in restricted shares for the 2010 fiscal year, the company said. Chief Operating Officer Roger Hochschild will be paid $800,000 in cash and $2.1 billion in shares.

Salaries for Roy Guthrie, chief financial officer, Diane Offereins, executive vice president of payment services, and Carlos Minetti, EVP for cardmember services and consumer banking, are also covered by the new policy, the company said.