Bank official claims he was fired for opposing boss’ bonus

By ANN ZANIEWSKI
Of The Oakland Press

The Oakland Press/ANN ZANIEWSKI Attorney Daniel Swanson (left) and John Schwab speak at a Tuesday press conference about Schwab’s lawsuit against his former employer, Citizens Republic Bancorp Inc.

A former executive at Citizens Republic Bancorp, Inc. has filed a lawsuit alleging that he was terminated in retaliation for speaking up against his boss getting a $7.5 million bonus, while the bank sought federal bailout money.

Clarkston resident John D. Schwab, 64, alleges he was fired earlier this year because he disagreed with president and CEO William Hartman’s demands for the bonus as the Flint-based bank, which lost millions of dollars in 2008, sought bailout funding.

Schwab was hired in 2002 and worked for Citizens Republic Bancorp Inc. as executive vice president and chief credit officer.

“I believe my exemplary career was brought wrongly to an abrupt halt in a manner that was malicious and intended to inflict both financial and emotional pain,” Schwab said Tuesday at the Southfield offices of his attorney, Daniel Swanson.

The two-count lawsuit filed Tuesday in Genesee County Circuit Court alleges wrongful discharge and age discrimination. It seeks a jury trial, damages and Schwab’s reinstatement at the company.

“We have not been served with the lawsuit, and have not had the chance to fully review the allegations,” Brian Smith, spokesman for Citizens Republic Bancorp, Inc., said.

Smith said it is company policy not to discuss pending litigation.

At a press conference Tuesday, Schwab said in December 2008, Hartman wanted to extend his employment contract and cash out early on his supplemental retirement plan, which would have involved getting a $7.5 million special bonus.

At the time, Citizens Republic Bancorp was seeking $300 million in federal bailout money, also known as TARP funds. The company reportedly lost $400 million in 2008.

Schwab said he felt Hartman’s demands were wrong and inappropriate. He shared those views with members of the board of directors.

On Jan. 29, days after Cathy Nash was named CEO and just before Hartman was to step down, Schwab said Hartman called him into his office and told him that he was “retiring” that day. Schwab said when he asked why, Hartman accused him of undermining him publicly and not supporting the decision to elect Nash CEO, allegations that Schwab denies.

“The act was carried out in a mean-spirited, vindictive manner, which cased embarrassment, grief and shock to me,” Schwab said. Swanson, Schwab’s attorney, said Hartman serves as chairman of Citizens’ board of directors. The lawsuit comes amid public outrage over the millions in bonuses paid to executives of the publicly rescued insurance giant American International Group. Citi zens Republic Bancorp, Inc. is the largest Michigan-based bank holding company.

Contact staff writer Ann Zaniewski at (248) 745-4628 or This e-mail address is being protected from spambots. You need JavaScript enabled to view it .