MBIA Inc. chairman and chief executive officer Jay Brown declined a $1.5 million bonus offered by the company's board in 2008, according to a document filed with the Securities and Exchange Commission Monday.
Brown, who rejoined the firm in February last year, took in $437,500 in salary last year. His annual salary will remain at $500,000 in 2009, MBIA said.
The company last May approved a grant of restricted stock to Brown with a fair value of $13.3 million. But the shares will vest on or before Feb. 18, 2013, only if the average closing share price over a 20-day period is $40 per share or higher.
Like most other bond insurers, MBIA has seen its stock battered as it has tallied up losses related to the structured finance products it backed. The company, which reported a loss of $2.7 billion in 2008, has had its stock fall nearly 95% since the beginning of 2007.
Due to the deterioration of MBIA's stock price, restricted stock awards given in recent years that were to vest after three-year periods have either gone unearned or are expected to. As a result, the company in Febuary last year agreed to pay out retention awards for employees who stayed with MBIA beyond Feb. 28, 2009.
The company paid out a total of $33 million to 382 active employees under the plan, the filing said. MBIA gave out about half of that total in December and the rest in February.
Under the retention plan, senior executives excluding Brown received compensation totaling $9.75 million. President, chief administrative officer, and chief financial officer C. Edward Chaplin received $2.25 million, chief investment officer Clifford D. Corso received $1.75 million, president and chief operating officer William C. Fallon received $2.25 million, chief portfolio officer Mitchell I. Sonkin received $2.25 million, and chief legal officer Ram D. Wertheim received $1.25 million.
In addition, MBIA awarded a cash performance bonus of $506,250 to Chaplin, $618,750 to Sonkin, $675,000 to Fallon, $450,000 to Corso, and $375,000 to Wertheim. It also gave each a $250,000 cash payment related to "success awards."
The company also gave those senior executives raises in 2009. Chaplin's salary increased to $750,000 from $600,000, Corso's to $650,000 from $600,000, Fallon's to $750,000 from $600,000, Sonkin's to $650,000 from $600,000, and Wertheim's $500,000 from $400,000.
In a separate filing, private equity firm Warburg Pincus said it had increased its ownership in MBIA to 25% from 20.2%. The stock rose 18.77% yesterday, closing at $3.67.