(Source: Associated Press/AP Online)
NEW YORK - MBIA Inc. Chairman, President and Chief Executive Joseph W. Brown received compensation valued at $13.8 million in 2008, nearly all in restricted stock that will vest only if the bond insurer's stock rebounds sharply, according to a regulatory filing Monday.
In mid-February 2008, former MBIA executive Brown, 60, came out of retirement to rejoin the board and take the helm of the battered insurer, replacing Gary C. Dunton, who resigned.
Like others in its industry, MBIA has been hit hard by losses on its coverage of risky financial instruments such as mortgage-backed securities. MBIA said in its proxy statement Monday that it restructured its 2008 executive compensation packages to contain both rewards for short-term achievements such as raising much-needed capital and the separation of its traditional municipal bond insurance operations in an effort to boost business, and long-term goals.
Brown received a 2008 salary of $437,500, but declined the company's offer of a $1.5 million bonus. Most of his pay package was in the form of $13.3 million in restricted stock awards that will vest on or before Feb. 18, 2013 only if the company's average closing share price over a 20 business day period equals or exceeds $40.
MBIA shares fell 79 percent during 2008 to finish the year at $4.07. Since the start of 2009 they have declined further, closing Monday at $3.09.
Former top exec Dunton received a salary of $120,000, a bonus of $960,000 linked to his capital raising efforts, above-market returns on deferred compensation of $10,849 and other compensation worth $3.61 million. The latter included $3.2 million in severance payments, $90,381 in dividends, and contributions to pension, 401(k) and retirement plans.
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 options and awards granted during the year. The calculations don't include changes in the present value of pension benefits, and they sometimes differ from the totals companies list in the summary compensation table of proxy statements filed with the SEC.
For fiscal 2008, the Armonk, N.Y.-based company booked a loss of $2.7 billion, or $12.29 per share, compared with fiscal 2007's loss of $1.9 billion, or $15.17 per share. Net premiums written increased 66 percent to $1.5 billion.
As of Dec. 31, MBIA Insurance Corp. held about $2.5 billion in cash and short-term investments. The company said its portfolio remains of average "AA"-rated credit quality. That double-A rating was lowered last summer from the highest "AAA" rating by Standard & Poor's and other ratings agencies.
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