8-KLeadership ChangesExhibits & Filings

CAPITAL ONE FINANCIAL CORP 8-K Report, Executive Changes (Feb 2, 2012)

Filed February 2, 2012For Securities:COFCOF-PLCOF-PICOF-PKCOF-PNCOF-PJ

Summary

This 8-K filing from Capital One Financial Corporation on February 2, 2012, primarily details two key events: the appointment of a new director and the approval of 2012 executive compensation plans. Peter Raskind was appointed to the Board of Directors, expanding its size to ten members and filling a role on the Audit and Risk Committee. He will receive standard compensation for non-employee directors and will stand for election by shareholders in May 2012. The filing also outlines the 2012 compensation structure for CEO Richard D. Fairbank and other Named Executive Officers, emphasizing a strong link between pay and company performance through equity-based, at-risk awards. This compensation is structured to be heavily deferred and contingent on achieving specific financial metrics over multiple time horizons, aligning executive interests with those of shareholders.

Key Highlights

  • 1Peter Raskind appointed to the Board of Directors, effective January 31, 2012.
  • 2Board size increased to ten directors to accommodate the new appointment.
  • 3Mr. Raskind will serve on the Audit and Risk Committee.
  • 42012 executive compensation plans approved for CEO Richard D. Fairbank and Named Executive Officers.
  • 5CEO compensation is entirely equity-based, at-risk, and deferred for three years, with no salary or bonus.
  • 6Executive compensation heavily emphasizes performance-based metrics (Adjusted ROA, Base ROA, Core Earnings) and multi-year vesting to align with shareholder interests.
  • 7Awards for 2011 performance were also granted to executives, consistent with previously disclosed plans but with added performance-based vesting provisions.

Frequently Asked Questions

Peter Raskind's appointment expands the Board of Directors to ten members and strengthens its oversight capabilities, particularly on the Audit and Risk Committee. His compensation will follow the standard structure for non-employee directors and he will be subject to shareholder election at the next annual meeting.

Mr. Fairbank's 2012 compensation is entirely equity-based and "at-risk," with no base salary or bonus. The compensation consists of performance shares (0-200% of target based on Adjusted ROA relative to peers, with deferred payout and potential forfeiture if ROA is not positive for three years), stock options (exercisable after three years, expiring in ten years, with performance-based vesting that can lead to forfeiture), and potentially restricted stock units based on 2012 performance (cash-settled after three years).

The compensation plans for both the CEO and Named Executive Officers are tied to key financial performance metrics. For Mr. Fairbank, Adjusted ROA (compared to a peer group) is a primary metric for performance shares. Both CEO and NEO compensation are also subject to performance thresholds for Base ROA and Core Earnings, which can impact the vesting and payout of stock options and other awards. These metrics are designed to reflect the company's profitability and operational efficiency.

Yes, Lynn Carter, who transitioned from President, Banking, to an advisory role, had her restricted stock award agreements amended. Shares that would have been forfeited upon her separation date will now continue to vest through February 10, 2013. Any unvested shares after that date will be forfeited.