Summary
Capital One Financial Corporation (COF) filed an 8-K on February 7, 2022, detailing executive compensation decisions made on February 3, 2022. The Compensation Committee and independent directors approved the 2022 compensation plans for CEO Richard D. Fairbank and other Named Executive Officers (NEOs), along with incentive awards for the 2021 performance year. These plans emphasize performance-based compensation, aligning executive interests with stockholders, and feature multi-year vesting periods for awards, with a significant portion being at-risk. The filing specifically outlines a total incentive award of $25.75 million for CEO Fairbank for the 2021 performance year. This award comprises performance share awards valued at $18.2 million, a deferred cash bonus of $4.55 million, and restricted stock units (RSUs) valued at $3.0 million. The performance shares are subject to three-year vesting based on Total Shareholder Return (TSR) and financial metrics like Growth of Shareholder Value and Adjusted ROTCE, relative to industry peers. For 2022, Mr. Fairbank's compensation structure remains similar, with RSUs granted and an opportunity for a year-end incentive award based on 2022 performance, with no cash salary. For the other Named Executive Officers, 2021 incentive awards were also granted, structured similarly to prior years. Their 2022 compensation plans maintain a significant variable component, with approximately 20% cash salary, 25% opportunity for a cash incentive award based on 2022 performance, and the remaining 55% in equity awards (RSUs and performance shares) contingent on 2022 performance. The total target compensation for NEOs in 2022 ranges from $4.73 million to $6.93 million.
Key Highlights
- 1Capital One's Compensation Committee and independent directors approved 2022 executive compensation plans and 2021 incentive awards.
- 2CEO Richard D. Fairbank received a 2021 incentive award totaling $25.75 million, comprised of performance shares, deferred cash, and RSUs.
- 3Performance share awards for CEO Fairbank are tied to a three-year performance period (2022-2024) based on relative TSR and financial metrics (Growth of Shareholder Value, Adjusted ROTCE) against industry peers.
- 4CEO Fairbank's 2022 compensation plan includes a $2.5 million RSU grant and an at-risk incentive award opportunity for 2023 performance, with no cash salary.
- 5Named Executive Officers (NEOs) received 2021 incentive awards structured similarly to prior years.
- 6For 2022, NEOs' compensation will be approximately 20% cash salary, 25% cash incentive opportunity, and 55% equity incentives (RSUs and performance shares), all largely performance-based.
- 7Total target compensation for NEOs in 2022 ranges between $4.73 million and $6.93 million.