Summary
This 8-K filing from Capital One Financial Corporation (COF) details a material definitive agreement regarding the 2006 compensation for its Chairman, CEO, and President, Richard D. Fairbank. In lieu of traditional salary, incentives, and retirement contributions for 2006, Mr. Fairbank was granted 573,000 nonstatutory stock options. This aligns executive compensation with long-term stockholder value creation and aims to retain a key executive. The stock options are granted at the fair market value of $87.275 per share, will vest in full on the fifth anniversary of the grant date, and have a ten-year expiration. Vesting acceleration is triggered by Mr. Fairbank's death, disability, or a change in control of the company. In the event of retirement, the options would continue to vest post-retirement with specific exercisability conditions. These options were issued under the Company's 2004 Stock Incentive Plan.
Key Highlights
- 1Richard D. Fairbank, CEO, granted 573,000 nonstatutory stock options for 2006 compensation.
- 2Option grant replaces salary, annual cash incentive, other long-term incentives, and retirement plan contributions for 2006.
- 3Exercise price of $87.275 per share, reflecting fair market value on the grant date.
- 4Options vest in full on the fifth anniversary of the grant date.
- 5Vesting accelerates upon death, disability, or change in control.
- 6Options expire ten years from the grant date.
- 7Retirement provisions allow for continued vesting post-retirement.
- 8Grant is part of an effort to align executive interests with stockholders and retain key talent.