Shareholders soundly rejected the executive compensation plan at New York Community Bancorp’s annual meeting earlier this week for the third time.
The $49.7 billion-asset company disclosed in a regulatory filing on Wednesday that its shareholders did not approve its executive compensation plan for 2017. Roughly 108 million shares were cast in favor of the measure while more than double that — almost 218 million shares — were voted against the plan.
The company had tweaked its executive compensation program after shareholders voted against the compensation plan in 2017 and in 2014, according to its 2018 proxy statement. The company switched to an annual vote on executive pay this year to get more immediate feedback.
“The committee took notice of the significant vote against the proposal and the fact that, under the former triennial schedule, the company’s 2014 ‘say on pay’ results were also adverse,” New York Community said in its 2018 proxy statement.
Joseph Ficalora, the company’s president, CEO and a director, made $7.7 million in 2017, down 33% from the year before. The company’s median employee made $68,578 in 2017.
Collyn Gilbert, an analyst with Keefe, Bruyette & Woods, was not surprised by the shareholder vote and said it is likely tied to the company's underperformance in recent years.
New York Community's stock is down more than 8% over the last year while the KBW bank stock index is up more than 21%.
"I don’t know what lies ahead for potential change at the board level, but I think they have some challenges ahead they need to rectify," Gilbert said.
Maureen Clancy, a director since 1999, told the board the day before the annual meeting that she would not stand for re-election. Clancy was chair of the compensation committee.
Shareholders reelected another director, Hanif Dahya, by a margin of just 0.13%. Dahya also sat on the compensation committee.
Gilbert said that the directors' experiences show that there are ongoing discussions around compensation structure at both the board and shareholder levels.
Because the executive compensation proposal is a nonbinding vote, the company’s compensation decisions are still ultimately up to the board.