Bank chief makes $1 a year


POSTED: Wednesday, May 26, 2010

John Dean didn't take the helm of Central Pacific Bank to get rich.

The 62-year-old Dean, appointed executive chairman in March to turn around the state's fourth-largest bank, will receive a salary of $1 and the equivalent of 200,000 shares of common stock as compensation through year-end, according to a regulatory filing yesterday with the U.S. Securities and Exchange Commission.

Dean will not receive any other salary, board or committee retainers or fees, or other compensation for the period of March 15 through Dec. 31.

He said in a separate news release that he will donate the shares he receives from the bank's parent, Central Pacific Financial Corp., to charitable causes in Hawaii, as well as contribute to Startup Capital Ventures in Palo Alto, Calif., where he is managing general partner.

The shares, which actually are restricted stock units, will vest in full if Dean continues to be employed through Dec. 1. If he is terminated other than for cause prior to Dec. 1, then a prorated portion of the stock units will vest. If he is terminated with cause before Dec. 1, the stock units will be forfeited. Upon vesting, Central Pacific will issue one share of common stock for each vested restricted stock unit, minus withholding taxes.

In addition, Dean will receive standard employee benefits and a monthly automobile allowance of $1,000.

Central Pacific Financial Corp.'s stock closed down 4 cents yesterday at $2.32 on the New York Stock Exchange.

“;The primary reason I accepted this position is my belief that CPB plays an important role in the financial services landscape of Hawaii and in providing banking choices for the businesses and consumers in our community,”; Dean said in a statement.

Dean, a 29-year banking industry veteran, previously turned around Silicon Valley Bank as its chief executive officer from 1993 to 2001 and chairman from 2001 to 2003, as well as two other financial institutions during this career. His appointment at Central Pacific is still awaiting regulatory approval.

He has been seeking to raise capital for Central Pacific, which received a mandate in December from the Federal Deposit Insurance Corp. and the Hawaii Division of Financial Institutions that calls for the bank to improve its capital position, asset quality, liquidity and management oversight.

Central Pacific lost nearly $293 million in 2009 and then last quarter lost an additional $160.2 million, which included a noncash goodwill impairment charge of $102.7 million to reflect the diminished value stemming from its September 2004 acquisition of rival City Bank.

Ron Migita, the former chairman, president and CEO of Central Pacific who retired in mid-March, initially received a $1 base salary and a chairman retainer of $160,000 a year when he added the president and CEO titles to his chairmanship on Aug. 1, 2008, after replacing the retired Clint Arnoldus.

Migita had his compensation changed for the six-month period beginning July 1, 2009, to $250,000, with an incentive equity grant opportunity of restricted stock up to a maximum of one-third of his total compensation for the same period. He ended 2009 with a total pay package of $743,332, which included stock, options and other compensation.

On Jan. 1 of this year, Migita's base pay was changed to $500,000, with no cash or equity incentive opportunity, and his chairman retainer was reduced to $100,000 from $160,000. He retired March 16.