On Feb 3, Capital One Financial Corp.’s (COF) Chief Executive Officer (CEO) Mr. Richard Fairbank received approval for compensation worth $5.7 million for 2013, as per the latest SEC filing by the bank. This reflects a 30% increase over 2012 and comprises deferred cash bonus of $2.8 million and 40,076 restricted stock units (RSUs) valued at $2.8 million.
The cash award has been deferred for a period of 3 years and will be paid in the first calendar quarter of 2017. Also, RSUs will translate into cash after being vested for a period of 3 years depending on the company’s performance during the said period. The aforementioned compensation is subject to clawback provisions of 2013 Proxy Statement.
For 2014, the company approved compensation worth $17.5 million for Fairbank. This includes the receipt of 0-150% of 123,309 shares of common stock subject to the performance of the company for a period of 3 years commencing Jan 1, 2014. A grant of 108,944 non-statutory stock options has also been approved.
Fairbank’s pay hike seems justified owing to the pivotal role he played in Capital One since its inception in 1988. Notably, the recent acquisitions – ING Direct, the online banking unit of Amsterdam-based ING Groep NV (ING), HSBC card business, part of HSBC Holdings plc (HSBC), and Beech Street Capital have significantly expanded the company’s scale of operations.
Further, the latest earnings release of Capital One depicts Fairbank’s efforts in driving the company’s performance favorably amid the ongoing macro-economic headwinds across the industry. For full-year 2013, earnings per share were $6.96, up 13.0% year over year. Notably, Capital One shares gained 30.0% in 2013.
Capital One currently carries a Zacks Rank #3 (Hold). A better ranked consumer loan institute is Discover Financial Services (DFS) with a Zacks Rank #2 (Buy).
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