First Republic Bank’s leaders agreed to forgo 2023 bonuses and some other pay as the company, which has lost more than 88% of its market value this year, grapples with a crisis in confidence in some regional banks.
(Bloomberg) — First Republic Bank’s leaders agreed to forgo 2023 bonuses and some other pay as the company, which has lost more than 88% of its market value this year, grapples with a crisis in confidence in some regional banks.
The decision was made “in light of the recent volatility in the banking system and its subsequent impact on First Republic Bank, and in order to foster closer alignment with the shareholder experience, and signal commitment,” the firm said Wednesday in a filing.
In addition to waiving bonuses for the current year, all executive officers also forfeited vesting in 2023 of all performance-based incentives, the filing shows. The firm’s founder and executive chairman, James Herbert, additionally agreed to waive his salary, effective March 12.
Shares of the San Francisco-based lender, known for catering to wealthy tech executives, have plunged this month as customers pulled their money, pressuring the bank to sell assets that had declined in value amid interest-rate hikes.
After the collapse of three regional banks earlier this month, Washington and the banking industry have been working to avoid a fourth by shoring up First Republic. Last week, 11 of the largest US banks agreed to park a total of $30 billion in deposits at the firm for at least four months. Bloomberg reported Tuesday that Wall Street leaders and US officials are exploring the possibility of government backing to make First Republic more attractive to a potential buyer.
Herbert’s total compensation in 2021, when he was chief executive officer, was $17.8 million, according to a proxy statement. Current CEO Michael Roffler’s compensation totaled $7.3 million in 2021. The company hasn’t yet published its pay information for last year.
–With assistance from Amanda Albright.
(Updates with more filing details, context beginning in third paragraph.)
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