MBIA Inc.’s four top executives won’t receive a cash bonus or long-term incentive pay for 2011 after talks with the New York State Department of Financial Services, the company said in a filing.
The bond insurer “concluded it was in the best interest of the company” for Chief Executive Officer Jay Brown, Chief Financial Officer Chuck Chaplin, Chief Operating Officer William Fallon, and Chief Legal Officer Ram Wertheim to forego cash bonuses or long-term incentive awards, according to a proxy filed today with the U.S. Securities and Exchange Commission today.
Kevin Brown, a spokesman for Armonk, New York-based MBIA, declined to comment beyond the filing.
As the compensation program is based on pay for performance, the decision “introduces the risk that our compensation will no longer be effective in meeting our objectives,” the company said.
Brown, who has no severance agreement, receives an annual salary of $500,000, MBIA said in the filing today. He had been eligible for an incentive bonus of as much as $2 million “based on performance,” the company said. Chaplin and Fallon received salaries of $750,000, and will remain at that level next year with a maximum cash bonus of $3.375 million and long-term stock awards of $1.5 million.
Clifford Corso, chief investment officer, received a base salary of $650,000 and a $548,500 performance-based cash bonus, 30 percent of the maximum, the company said in the filing. Corso isn’t eligible for the company’s long-term incentive award. Fallon rated his success 67.5 percent of his target bonus.
Anthony McKiernan, chief portfolio officer, received base pay of $450,000 with a bonus of $1.75 million, or 78 percent of his maximum potential award of $2.25 million, and a long-term deferred long-term incentive award of $1 million in restricted stock vesting in March 2017, according to the filing. The bonus was in part based on his “successfully negotiating early policy settlements of $32.4 billion in exposure that has eliminated a substantial amount of potential loss volatility,” the company said in the filing.