New York Community Bancorp Inc. Chief Executive Officer Joseph Ficalora didn't have to pay taxes on $2.84 million in restricted stock he collected last year. His company picked up the tab.
The Westbury, New York-based lender paid $2.76 million to "assist the officer with tax obligations" on stock awards from previous years that vested in 2014, according to its April 24 proxy statement. The payment was intended to allow him to "maximize his retention of company stock," the bank said in the filing.
New York Community Bancorp has paid $7.61 million of Ficalora's stock-award taxes since 2009, the first year it disclosed the reimbursement. It discontinued the practice for shares awarded in 2015, the filing shows. He had $10.4 million in unvested stock awards as of Dec. 31, 2014, for which the company may still foot the tax bill if he meets his performance goals.
John Puccio, a spokesman for the lender, declined to comment beyond the filings.
Four of the company's other named executives got a combined $3.23 million in restricted-stock tax payments last year. The perk isn't disclosed for any of the other executives on the Bloomberg Pay Index, a daily ranking of executive compensation.
Gross-ups, or tax reimbursements for executives, are sometimes paid by companies when executives are terminated after acquisitions. They've become increasingly rare at U.S. companies as proxy advisory firms such as Institutional Shareholder Services Inc. and Glass Lewis & Co. have pressured boards to eliminate them, saying they can make compensation opaque and inflate costs.
ISS says gross-ups on taxes tied to restricted stock can be among its "problematic pay practices," according to its 2015 policies.
New York Community Bancorp's compensation committee retained Meridian Compensation Partners LLC as a consultant in 2014, and the committee's chairman is Maureen E. Clancy.
Ficalora's reported compensation in 2014 was $11.2 million, including a $1.35 million salary and a $2.5 million cash bonus. His stock awards have been dependent on New York Community Bancorp achieving certain performance goals.