First Republic Bank (FRC) paid its founder James Herbert as well as his family members large sums of money, according to a popular journal. The exclusive report said that all of them were paid millions of dollars for work at the nation’s 14th largest bank. In the past three weeks First Republic stock fell by over 90 percent. Wealthy individuals have pulled deposits as they fear a scenario similar to the one at Silicon Valley Bank might unfold in the near future.
In an exclusive, the Wall Street Journal reported that Mr. Herbert, who was the chief executive of First Republic and stepped down and assumed the role of executive chairman in 2022, was paid $17.8 million dollars in 2021, according to the disclosures of the bank for the year.
Mr. Herbert’s brother-in-law received $2.3 million for advisory work while Mr. Herbert’s son received $3.5 million for overseeing a lending unit at First Republic Bank, in 2021. The outlet also quoted bank disclosures that said that similar amounts were paid to the two family members, in 2020.
The WSJ compared Mr. Herbert’s pay with institutions that are of similar size and found it to be much higher.
This is our comparison referencing the WSJ.
Mr. Herbert–First Republic Bank with $212 billion assets at the end of 2022–paid $17.8 million in 2021.
CEO–Bank of New York Mellon with $324 billion in assets–paid $9.3 million in 2021.
CEO–Silicon Valley Bank with $209 billion in assets–paid $9.9 million.
The WSJ noted that First Republic Bank paid its then CEO Mr. Herbert a remuneration that was close to those of larger banks and quoted the following salaries, according to the annual proxy fillings of the banks.
CEO–US Bancorp–$19.1 million in 2021.
CEO–Citigroup–$20.5 million.
Mr. Herbert’s family members also received large payouts when compared with the remuneration earned by family members of top executives of midsize and large banks.
The WSJ reported that disclosures showed that these family members were “typically paid less, often under $250,000” while Mr. Herbert’s son received $3.5 million and Mr. Herbert’s brother-in-law James Healy received $2.3 million as earnings.
On Wednesday, First Republic Bank said that Mr. Herbert and a few other top executives would take zero bonuses in 2023. Mr. Herbert, who founded First Republic Bank in 1985, will also take no salary for 2023 and would forgo some previous stock awards that were given to him by the bank.
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