Summary
This 8-K filing from Capital One Financial Corporation (COF) on December 13, 2006, primarily details the 2007 annual compensation package for its Chairman, CEO, and President, Richard D. Fairbank. Instead of traditional salary, cash incentives, or other long-term incentives, Mr. Fairbank will receive a significant grant of nonstatutory stock options. The stock options grant is for 594,851 shares with an exercise price of $76.45, matching the fair market value at the grant date. These options are designed to align Mr. Fairbank's interests with those of shareholders by incentivizing long-term value creation. The compensation structure emphasizes retaining key executive talent and reflects the company's strategy to link executive rewards directly to the company's stock performance over an extended period.
Key Highlights
- 1Richard D. Fairbank, Chairman, CEO, and President, will receive 594,851 nonstatutory stock options as his entire 2007 compensation.
- 2The stock options have an exercise price of $76.45 per share, equal to the fair market value on the grant date.
- 3Options become fully exercisable on the fifth anniversary of the grant date, or immediately upon death, disability, or a change in control.
- 4Options expire ten years from the grant date.
- 5In the event of retirement, options continue to vest post-retirement with an exercisability period of the shorter of five years from retirement or the remaining option term.
- 6This compensation structure is intended to align executive interests with long-term shareholder value.
- 7The grant is made under the company's 2004 Stock Incentive Plan.