Summary
This Form 8-K filing from Capital One Financial Corporation (COF) on December 23, 2004, primarily discloses the compensation package approved for its Chairman, CEO, and President, Richard D. Fairbank, for the year 2005. In lieu of salary, incentives, and retirement contributions, Mr. Fairbank was granted nonstatutory stock options to purchase 566,000 shares of common stock. The stock options have an exercise price of $82.385, reflecting the fair market value at the grant date. A key aspect of this compensation is its long-term performance orientation, with options becoming exercisable in full only on the fifth anniversary of the grant date, or earlier upon specific events like death, disability, retirement, or a change in control of the company. This structure aims to further align Mr. Fairbank's interests with those of the shareholders and to ensure the retention of a key executive.
Key Highlights
- 1Richard D. Fairbank, CEO, granted 566,000 nonstatutory stock options for 2005 compensation.
- 2The stock options replace salary, annual cash incentive, other long-term incentives, and retirement plan contributions for 2005.
- 3The exercise price of the options is $82.385, equal to the fair market value on the grant date.
- 4Options are fully exercisable only on the fifth anniversary of the grant date.
- 5Early exercisability is triggered by death, disability, retirement, or a change in control.
- 6The compensation structure emphasizes long-term value creation and executive retention.
- 7Options are granted under the company's 2004 Stock Incentive Plan.