Bank of Valletta pays its new CEO Rick Hunkin a total of € 459,000 in salaries and bonuses.
The former Northern Rock executive was named the bank’s CEO in 2019, after being sought out by the bank as the first foreign CEO in its history instead of choosing grassroots executives.
The BOV remuneration report reveals that Hunkin is paid € 350,000, in addition to variable compensation in cash and shares of approximately € 41,000, € 47,000 in benefits and € 20,500 in attendance fees.
A basic annual fee of € 20,500 is paid to each director, including executive directors, and € 80,000 is paid to the Chairman of the board of directors.
BOV employees, Miguel Borg and James Grech, Labor candidate for Europe, sit on the board of directors as non-executive directors and receive their attendance fees in addition to their salaries, respectively 149,000 € and 65,000 € each. Their total salaries are € 215,000 for Borg and € 92,000 for Grech after variable compensation and other costs.
The performance evaluation of the CEO was carried out by each non-executive director individually according to three criteria, during the first six months of his mandate. The performance and variable compensation of the CEO was then reviewed by the BOV’s compensation committee and recommended to the board for approval. Hunkin’s variable compensation amounts to 12% of his fixed salary, excluding social benefits. 50% of the variable compensation is paid in the form of BOV shares.
Hunkin’s first full year as CEO of BOV coincided with the onset of the COVID-19 pandemic, which saw BOV’s pre-tax profit falls to € 15.2 million, and no dividend announced.
Banking regulators are not recommending the distribution of dividends, in order to ensure that BOV can meet the strong demand for capital and support the Maltese economy until the end of the pandemic. The bank has said it wants to maximize shareholder value over the medium term and restore dividend payments to adequate, stable and predictable levels. “The resumption of a stable dividend policy therefore requires clarity on the results of the COVID-19 event and the major litigation, coupled with the successful implementation of the transformation strategy to generate sustainable profitability at the future, ”the bank said.
The most negative impact on the bank’s net income was a € 39.8 million increase in non-performing loans (NPL) on aged non-performing debtors and € 38.1 million in provisions related to the COVID-19.
The Englishman Hunkin was Chief Risk Officer at Chetwood Financial from April 2019 and held the same position in his former position at Provident Financial, the Royal Bank of Scotland Williams & Glyn unit and Northern Rock. In 1998, Hunkin was Risk Director for the National Bank of New Zealand, then joined Goldfish Bank and C&G plc, a joint venture where he managed the interests of Lloyd’s TSB. He joined GE Money as Chief Risk Officer in 2006, before moving to Northern Rock in 2008 where he was hired to manage the re-nationalized bank until it returned to private ownership. He went on to become Chief Risk Officer and Director of Tesco Bank in 2011, moving to RBS in 2014 and Provident in November 2017, before moving to Chetwood earlier this year.