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Executive officers at First Republic Corp. have “elected” not to receive bonuses this year amid heavy uncertainty about the bank’s future and a nearly 90% plunge in its shares over the past two weeks.
The company said in a Wednesday filing with the Securities and Exchange Commission that the move comes “[i]n 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 to the Bank and all of its stakeholders, including very importantly, its clients, colleagues and communities.”
First Republic
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Executive Chairman James Herbert and Chief Executive Michael Roffler were specifically called out as having elected to cut their bonuses “to zero” this year, along with “all other” executive officers at the bank.
Additionally, the executive officers have forfeited vesting of performance-based incentives in 2023. Herbert “further elected to waive his salary as Executive Chairman effective March 12, 2023,” the filing noted.
First Republic shares have gotten pummeled in the past couple weeks as Silicon Valley Bank’s collapse sparked concerns about outflows at other regional banks. The company has a similar client focus to what Silicon Valley Bank had, with an emphasis on serving higher-end clients in Silicon Valley and on the East Coast, and it also has had heavy exposure to long-dated securities. Numerous big banks agreed to deposit $30 billion at First Republic earlier this month in an attempt to help prop up the bank.
After closing at $115 on March 8, before Silicon Valley Bank’s troubles blew open, First Republic shares have since fallen to $13.33 and are down 88% in that span. The stock was up about 2% in premarket trading Thursday.
The company continues to see its debt downgraded by ratings agencies, with Fitch lowering its issuer default rating again late Wednesday.
