By a wide margin, shareholders rejected the executive compensation plan at Preferred Bank in Los Angeles.
The $3.6 billion-asset company disclosed in a regulatory filing Monday that about 58% of the 12 million shares cast during its annual meeting rejected its executive pay.
The result of the May 15 meeting stood in stark contrast from last year, when 98% of the shares supported the compensation plan. In 2016, nearly 70% of shares backed Preferred.
Compensation for Preferred Chairman CEO Li Yu increased by 16% last year, to $4.8 million. President and Chief Operating Officer Wellington Chen had an 8% increase, to $1.2 million.
Preferred earned $43.4 million in 2017.
The company hit a snag in late April, when a borrower defaulted on a roughly $47 million loan. The loan's balance, tied to four properties, is well below appraised values, and Preferred said it did not expect the default to have a material impact on its operations.
While the nonbinding compensation vote might be viewed as a rebuke for Yu, who helped found Preferred in 1991 and has been CEO since 1993, it does not appear to have threatened his job security. Shareholders overwhelmingly re-elected him to a two-year board term on the board.