Genworth Financial Inc. said ex-Chief Executive Officer Michael Fraizer got a $2.25 million payment after he resigned from the insurer amid a stock plunge.
Fraizer, 54, stepped down May 1, after overseeing a share decline of more than 80 percent since 2006 as losses at the company’s mortgage-insurance unit drained capital. He agreed to a release of claims against the company and said he wouldn’t compete against Genworth for a year or solicit its staff for two years, the insurer said in a regulatory filing today.
“In consideration of the foregoing release and covenants, and in recognition of Mr. Fraizer’s many years of service with the company and its predecessor businesses, we agreed to provide Mr. Fraizer with a one-time lump sum separation payment equal to two times his base salary,” the Richmond, Virginia-based insurer said in the filing.
Fraizer, who guided Genworth through its spinoff from General Electric Co. after a 2004 public offering, had misjudged when results would rebound at the U.S. mortgage-insurance business. He told investors in a December 2009 presentation that Genworth expected quarterly operating earnings at the unit would “turn positive in the mid-2011 time frame.” In a July 2011 statement, Genworth cited “worsening trends” in the business as it used $375 million to provide capital support to the unit.
Fraizer’s total compensation last year was $6.69 million, including separation pay and the accelerated vesting of some stock awards, Genworth said today in the filing.
Chief Financial Officer Martin Klein served as acting CEO until Thomas McInerney became the company’s leader on Jan. 1. Klein got an extra $20,000 a month in his eight months as acting CEO, helping boost his total 2012 compensation to $3.42 million, from about $1.8 million the prior year, the insurer said.
Genworth’s shares have rallied 62 percent since May 1. The stock added 2 cents to $9.96 at 10:21 a.m. in New York.