American Express Co
Banks have made similar moves to increase base pay, but none have so far have reported hikes as dramatic as the one Chenault is due to receive from the largest U.S. credit card company by purchases. Chenault's base compensation is also high relative to other Wall Street firms.
Boosting base pay while reducing bonuses is increasingly seen as a way to reduce incentives for executives to juice up their compensation by taking outsized risk.
American Express said it was also boosting base pay for three other senior executives, according to a filing with the U.S. Securities and Exchange Commission.
Edward Gilligan, vice chairman, will make $1.45 million; Stephen Squeri, group president of global services and chief information officer, will make $1 million; and Daniel Henry, executive vice president and chief financial officer, will make $850,000.
Separately, Capital One said its chief executive, Richard Fairbank, will receive options to buy Capital One shares, the opportunity to earn restricted shares, and the chance to earn performance shares tied to Capital One's relative performance to other banks.
The target value for the package is about $13 million, but the value depends on factors including the bank's performance.
Fairbank has not taken a salary since 1997, according to a spokesman.
Base compensation for American Express CEO Chenault's exceeds Brian Moynihan's. The new Bank of America Corp
Moynihan's predecessor, Kenneth Lewis made $1.5 million in 2008, at the height of the financial crisis, more than other banking CEO made that year. JPMorgan Chase & Co
Base pay is usually a small portion of overall compensation for chief executives in the financial sector.
HOME SECURITY SYSTEM
American Express repaid the $3.4 billion bailout it received as part of the largest taxpayer rescue of the financial system in June. The company reported higher quarterly earnings last week, beating forecasts, helped by rising consumer spending and lower credit costs.
Chenault told employees last fall that American Express would reverse companywide pay cuts instituted in early 2009, including a 10 percent cut for executives above the level of senior vice president. He cited improving business conditions.
Chenault's total compensation package for 2009 is expected to be disclosed early this year. His 2008 package totaled $27.33 million, a 5 percent increase over what he made in 2007 even though the company faced ballooning credit losses.
His 2008 pay included $18.12 million in stock and option awards, $6.11 million in non-equity incentive plan compensation, $641,000 of pension value and non-qualified deferred compensation and $1.21 million in other compensation.
Additional perks included use of the company's aircraft, automobiles, and a home security system.
(Reporting by Steve Eder; Editing by Derek Caney, Tim Dobbyn, Leslie Gevirtz)