My praise and contempt for CEO actions is pretty well known around these parts. I've been running a weekly series looking at CEO gaffes for nearly 11 months now (with seemingly endless material, may I add), and recently I've begun highlighting incredible CEOs who deserve a pat on the back. Last year I even listed my top 10 CEOs of the year and my 10 worst CEOs of the year.
However, this year we're changing things up a bit, and we're putting the ball in your court! This year, The Motley Fool community is going to decide which CEO is the best of this year and which should be banished to a distant island. Each week, for the past eight, I've nominated one chief exec to each category. In total, you and your community members will have eight great CEOs and eight terrible ones to choose from when voting commences next week. For reference, here is last week's best-CEO nominee. In the meantime, I encourage you to get the discussion started on the "CEO of the Week" board.
Without further ado, I give you the eighth and final nominee for CEO of the Year: Grayson Hall, CEO of Regions Financial (NYSE:RF).
Why Grayson Hall?
- Paid off TARP: There's nothing quite like the feeling of getting a monkey off your back; just ask Regions Financial shareholders. Just this year they've seen Regions Financial paying off, in its entirety, the $3.5 billion in Troubled Asset Relief funds that it borrowed during the height of the financial crisis, a divestiture of its highly volatile investment banking unit, Morgan Keegan, to Raymond James Financial (NYSE:RJF) for $930 million plus $250 million in dividends, and a successful capital equity raise of $900 million earlier this yearand $500 million just over a week ago. With a renewed emphasis on its core banking operations, these moves have freed Regions up to consider potential merger possibilities and/or raise its dividend.
- Improving results: Regions' ability to pay off its TARP obligations didn't stem solely from non-core asset sales or equity offerings; it also came about because of its improving bottom-line results. In its most recent quarter, released two weeks ago, Regions noted a near-tripling in net income despite a slight decrease in loan yields. More importantly, non-performing loans and loan loss reserves continue to decline, which signals both the improved quality of its loan portfolio as well as a bottoming housing landscape. Finally, as my Foolish colleague and senior banking analyst Matt Koppenheffer notes, Regions is well capitalized. It ended the quarter with a healthy Tier 1 common ratio of 10.5%, which is higher than some of its larger money center peers like SunTrust Banks (NYSE:STI) at 9.8%, Wells Fargo (NYSE:WFC) at 10.1%, and US Bancorp (NYSE:USB) at 9%. Furthermore, with its stock at just 62% of its book value, it's cheaper relative to SunTrust at 72% of book value, Wells Fargo at 125%, and US Bancorp at 184%.
- Reasonable pay: One of Regions Financial's shareholders' biggest gripes in recent years has been the compensation packages of previous CEOs and board members. That hasn't been an issue with Grayson Hall, who was paid roughly $4.6 million less than his predecessor from the get-go. In Forbes' annual list of CEO compensation, Hall ranks as just the 394th highest compensated CEO of the roughly 500 CEOs listed. That's a reasonable pay package considering that he's orchestrated the repaying of TARP and the recapitalization of the bank.
- Outperforming his peers: Lastly -- and this should come as no surprise -- the share price has responded to Hall's initiatives and rocketed higher by 54% year to date (when adjusted for dividends). According to the Motley Fool CAPS screener, of the 245 banking stocks, its trailing 52-week return is the 20th best of the group.
Is Grayson Hall the CEO of the year? That's up to you and the rest of the Motley Fool community to decide. In the meantime, be sure to hit up the "CEO of the Week" board to voice your opinion to the community.
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Fool contributor Sean Williams has no material interest in any companies mentioned in this article. He loves giving credit when credit is due. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.
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