Capital One Financial (COF - Free Report) co-founder, chairman and chief executive officer (CEO) — Richard Fairbank — received 12.9% pay hike in his total compensation package. His annual salary was to $19.75 million in 2019 from $17.5 million in 2018, according to a Securities and Exchange Commission (SEC) filing last week.
Notably, the CEO’s pay package does not include any cash salary; rather it is fully-restricted stock, options and cash bonuses deferred for three years. The major portion of compensation about $13 million is in the form of restricted stock.
He has been instrumental in boosting adjusted revenues of $28.7 billion, up 4.4% from the prior year, despite the rapidly-evolving challenging environment. Moreover, higher adjusted earnings per share and acquisition of the Walmart credit card portfolio also acted as positives for the CEO.
The way of tackling the company's huge cybersecurity breach which was announced in July 2019 and had personal information accessed of about 106 million people applying for credit cards or credit card products also acted as a tailwind.
The hike, as believed, is well deserved keeping in mind Fairbank’s contribution to Capital One Financial’s strong loan and credit card growth. Per the company’s filings, Capital One "engaged quickly and openly with customers in response to the Cybersecurity Incident. Made free credit monitoring and identity theft protection services available to all consumers, updated affected individuals when appropriate, and monitored customer engagement and servicing channels for feedback."
All positive factors have caused investors to become optimistic about this banking giant’s long-term prospects. Notably, the company's share price appreciated 36.1% in 2019 compared with 34.2% growth registered by the industry.
Among other banking giants, Bank of America Corp.’s (BAC - Free Report) chairman as well as CEO — Brian T. Moynihan’s — total compensation for 2019 remained flat with the prior-year level. Other Wall Street biggies that have announced compensations for CEOs include JPMorgan (JPM - Free Report) , with a hike of 1.6%, while Morgan Stanley (MS - Free Report) has announced a reduction of 7%.
Fairbank has been adept in strategically evaluating the various facets of Capital One Financial’s major businesses. We believe the pay hike will prove to be a major morale booster. Capital One Financial’s fundamentals remain highly promising with a diverse business model and a solid balance sheet.
Capital One Financial currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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