Morris Rousse
March 23, 2007Harold Fuselier
March 30, 2007
THE ASSOCIATED PRESS
Capital One Financial Corp. Chairman and Chief Executive Richard Fairbank received compensation the company valued at more than $18.1 million in 2006, almost all of it in options awards and roughly the same amount as the past two years, according to a regulatory filing made last Tuesday.
Fairbank, 56, received options awards with an estimated value of $18 million at the time they were granted, but did not receive a salary, a bonus or any other cash and equity-based incentives.
Since 1997, Fairbank has been compensated on equity and options awards, which are dependent on Capital One’s long-term performance.
“The compensation committee continues to believe that, at this stage in the company’s development, compensating the CEO almost entirely in equity is the mechanism that most aligns the CEO’s financial rewards to the value he delivers to stockholders,” the filing said.
Fairbank did receive $151,484 in other compensation, including a $19,030 auto allowance, $65,000 for financial planning services and $43,264 for a personal driver, according to the McLean, Va.-based company’s filing with the Securities and Exchange Commission.
The Associated Press calculations of total pay include executives’ salary, bonus, incentives, perks, above-market returns on deferred compensation and the estimated value of stock and options awards granted during the year. The calculations don’t include changes in the present value of pension benefits.
Once a stand-alone credit card company, Capital One has moved in the past year and a half to acquire traditional banks as part of an effort to diversify.
In November 2005, Capital One bought New Orleans-based Hibernia Corp., which had branches in Texas and Louisiana, for $4.9 billion. In December, the company completed its $13.2 billion acquisition of North Fork, which operates banks in New York, New Jersey and Connecticut.
The deals, which make Capital One the 11th-largest bank in the U.S. by deposits, drew mixed responses from Wall Street. The stock was flat for the first half of 2006, then plunged in the summer because of credit concerns, especially in the United Kingdom.
In the past year, Capital One’s shares have traded on the New York Stock Exchange in a range of $69.30 to $87.50.
