After a report concerning questionable executive compensation payouts an investigation on behalf of current long term investors in M&T Bank Corporation (NYSE:MTB) over potential breaches of fiduciary duty related to the historical and potential compensation that was awarded certain senior officers and executives of M&T Bank Corp. was announced.

Kenneth R. Feinberg, the Obama administrations special master for executive compensation, reviewed over the past five months compensations paid to the 25 highest earners of 419 banks between October 2008, when the first US Troubled Asset Relief Program funds were dispensed, and February 2009, when the stimulus bill took effect. Kenneth Feinberg said he immediately excluded most of the 419 companies from his examination because they said they didn't pay any executives more than $500,000, but he wound up citing 17 banks for making troublesome payments. 11 of the 17 banks making troublesome payments have already repaid the government for money they borrowed under TARP.

Mr. Feinberg determined that banks paid out $1.6 billion in unwarranted bonuses, retention awards, stock grants and 'golden parachute' retirement packages to their top earners at the height of the financial crisis.

M&T Bank Corporation, the bank holding company located in Buffalo, New York, is among the 17 companies. Another of the other 16 companies was Citigroup, which was reportedly identified for having the most egregious compensation packages, according to government officials with knowledge of Mr. Feinbergs report. Citigroup reportedly handed out several hundred million dollars in pay in 2008 as it neared collapse.
Nearly two-thirds of the payouts amount to Andrew J. Hall, owner of a nearly 1000 year old German Medieval Castle, who reportedly received a payout of more than $100 million in connection with spin-off of Citigroups Phibro energy trading unit for $370 million to Occidental Petroleum in 2009.

In most cases the banks told Feinberg that they were obligated by employment contracts to pay the bonuses and other compensation, but Kenneth R. Feinberg said to reporters that those 17 companies exercised 'poor judgment' for making the $1.6 billion in 'ill-advised payments' to their top paid employees shortly after accepting TARP funds from the federal government. 'They shouldn't have made these payments,'' Feinberg told reporters. 'They were ill-advised. They were troublesome.'

According to the investigation by a law firm the investigation on behalf of current long term investors in M&T Bank Corporation (NYSE:MTB) stock focuses, among other things, on possible shareholder claims that certain of M&T Banks senior officers were unjustly enriched through their receipt of unwarranted, excessive or unearned compensation in past years. Certain senior officers and executives at M&T Bank Corp. were awarded salaries, bonuses, stock options and other forms of long-term, incentive or retirement compensation that were, so the investigation, excessive or unwarranted based on M&T Banks performance.

Robert G. Wilmers, the current Chief Executive Officer of M&T Bank, earned $3.66million in total compensation in 2008, and $2.93million in 2009, or a 4year total compensation of $27.03million

The investigation by the law firm focuses on claims that the prior compensation awarded at M&T Bank Corporation is now clearly improper based upon its current operating condition.

M&T Bank Corporation reported a decreasing Net Income from $654.26million in 2007, to $555.89million in 2008, and $379.89million in 2009. M&T Bank Corporation received in 2008 600million in TARP funds. Shares of M&T Bank Corporation (MTB) traded at $124.42 per share in 2007, but fell during 2008 to roughly 50% of its value, or $68.10 per share, and continue to lose value to $31.85 per share in 2009. Since then M&T Bank Corporation (MTB) shares were able to regain value and traded recently at $89.56 per share, still 30% less value per share than 2007.

Finally and most importantly the investigation focuses also on possible claims that would allow M&T Bank Corporation (NYSE:MTB) stockholders to influence or control future compensation decisions at M&T Bank Corp.

Within the industry huge amounts have been allocated for payout and bonus. Goldman Sachs is reportedly paying out an average of $544,000 per worker, though many could earn several times that amount, JP Morgan Chase on average pays about $400,000, and Morgan Stanley pays about $262,000. Morgan Stanley reportedly put aside $8.3 billion for pay and benefits during the first half of 2010, 44% more than during the same period last year. Goldman Sachs put aside $3.8 billion for pay and benefits in the second quarter equivalent to 43% of total quarterly revenue in addition to $5.5 billion in the first three months.