Summary
Capital One Financial Corporation (COF) filed an 8-K on January 29, 2010, detailing the compensation plans approved for its Chairman and CEO, Richard D. Fairbank, and other named executive officers, effective January 27, 2010. The compensation structures are heavily weighted towards equity-based, performance-driven awards, with significant deferral periods, emphasizing alignment with shareholder interests and a "pay-for-performance" philosophy. Notably, Mr. Fairbank will receive no base salary or cash bonus, with his compensation entirely at-risk and subject to the company's performance over multiple time horizons. The compensation plans are designed to be "at-risk" and tied to company performance over three-year periods, with payouts often deferred. For Mr. Fairbank, performance will be measured against a peer group in the KBW Philadelphia Bank index. The plans for other named executive officers also incorporate a mix of salary, restricted stock units, and long-term incentive awards, with a significant portion being equity-based and subject to vesting and performance criteria.
Key Highlights
- 1CEO Richard D. Fairbank's compensation is entirely equity-based, at-risk, and deferred for three years, with no salary or cash bonus.
- 2Mr. Fairbank's potential equity award is tied to Capital One's performance relative to a peer group over a three-year period.
- 3Mr. Fairbank received stock options with an exercise price of $36.55, exercisable after three years and expiring in ten years.
- 4A portion of executive compensation is tied to future performance in 2010, with awards and settlement occurring later.
- 5Compensation for other named executive officers includes a mix of base salary, restricted stock units, and long-term incentive awards.
- 6A significant portion of the named executive officers' compensation is at-risk, equity-based, and subject to vesting schedules and performance evaluations.