Huntington Bancshares’ pending deal to buy FirstMerit Corp. boosted shareholder wealth in the Akron banking company by hundreds of millions of dollars.



And the sale may mean FirstMerit’s top executives will get golden paydays worth tens of millions of dollars as well.



The stock value, also known as the market cap, of FirstMerit was up about $630 million by the end of the week. Monday, just prior to the Huntington announcement, FirstMerit was valued a bit more than $2.5 billion based on a share price of $15.37.



On Friday, FirstMerit’s market cap was $3.17 billion, based on the number of outstanding shares — about 165.8 million — times the closing price of $19.38.



In a conference call directed at FirstMerit employees last week, Chief Executive Officer Paul Greig said he is personally comfortable with the bank sale.



“It is absolutely in human nature to have concerns and misgivings and thoughts that are probably thinking more of the first letters in merger, me. From a personal perspective, I am comfortable with our future,” Greig said. “I hope you’re going to be as comfortable today as I am today as you absorb this change and see the management team.”



Anyone who owned a sizeable chunk of FirstMerit stock is probably feeling more comfortable, too. That includes the banking company’s top executives, board members and institutional shareholders such as mutual funds, pension funds and investment firms.



Huntington is offering 1.72 shares of its stock for each FirstMerit share. It is sweetening the deal with a $5 cash payment per FirstMerit share. Huntington said that values its offer at $3.4 billion, or the equivalent of $20.14 per FirstMerit share. (That’s 35 cents below the 52-week high of $21.49 for a share of FirstMerit.)



In addition, the sale of FirstMerit could trigger contractual provisions that would pay significant money to senior banking executives.



A Huntington spokesman deferred comment to FirstMerit; a FirstMerit spokesman said he was unavailable to comment on Friday on whether a sale to Huntington will result in the contractual triggers being pulled.



FirstMerit’s top bosses are in line to get big bucks under “change in control” and “displacement” provisions outlined in the banking company’s latest proxy filed with the U.S. Securities and Exchange Commission. The publicly available provisions outline severance compensation to executives for such things as being fired for cause, not for cause or when there are such things as corporate buyouts and mergers.



The proxy language also says that FirstMerit will reduce severance compensation so it falls below what is considered a “golden parachute” payment.



Mark Whitmore, Kent State University assistant professor of management and information systems, said it appears FirstMerit incorporated what is considered “golden handshake” language, not a “golden parachute.” The difference is in how the severance benefits are determined, he said.



“They’re very common,” Whitmore said.



These kinds of provisions are done to attract and retain top executive talent and sometimes also as a means to deter a takeover by making executive buyouts excessively costly, he said.



“An executive is a contract employer, kind of like a professional sports player,” Whitmore said. “You want to fire your player, you have to pay out the contract. ... Usually, the acquiring company will fire the leadership team.”



According to the FirstMerit proxy, the change in control and displacement packages for five named executives show:



•?Chairman and CEO Greig could reap as much as a $31 million-plus windfall. His severance packages range from $21.1 million to more than $31.7 million.



•?Chief Financial Officer Terry Bichsel’s severance package ranges from nearly $5.5 million to more than $8.4 million.



•?Vice Chairman FirstMerit Corp. and Chairman and CEO of FirstMerit Michigan Sandra Pierce’s severance packages range from $10,268 to more than $4.3 million.



•?Chief Credit Officer William Richgels’ severance packages range from $5 million to more than $8.1 million.



•?Senior Executive Vice President, Commercial Banking, David Goodall’s severance packages range from $60,909 to nearly $2.8 million.



It’s also possible that the named FirstMerit executives will not get so-called golden handshakes if they are not displaced, Whitmore said.



Huntington announced that Greig will retire as CEO upon completion of the sale but will remain on as a consultant for a few more years.



That could be a way to “run out” a contract while retaining shareholder value by tapping Greig’s knowledge and skills instead of letting a top executive leave with no further obligations, Whitmore said.



Jim Mackinnon can be reached at 330-996-3544 or jmackinnon@thebeaconjournal.com. Follow him @JimMackinnonABJ on Twitter or www.facebook.com/JimMackinnonABJ. His stories can be found at www.ohio.com/writers/jim-mackinnon.