Capital One Cuts Dividend by 87%, Paid CEO $250M In Options

capital-oneCapital One has just announced today it will reduce its quarterly dividend by 87% to help conserve cash during this tuff economic time. The company says it will save $500 million annual as part of the reduced dividend to $0.05 per share from $0.375 per share. Capital One also said its Tier 1 capital ratio was 11% as of Feb 28, 2009.  Capital One has been hit hard, with its share price down 75% only in 2009, but the company still managed to grant 3.6 million stock option since 1997 given to Capital One CEO Richard Fairbank worth a record $250 million. In 2007, Fairbank earned $17 million in options. In 2008, he was compensated only about $70,000 for security, health benefits, and insurance, among other things, as the bank cut costs to deal with the global credit downturn.

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Hercules holds a B.Comm Finance from Ryerson University in Toronto, Canada. He is a Chartered Financial Analyst (CFA) level 3 candidate. He was previously a contributor at FiLife, a finance website owned by Dow Jones and IAC. Write to [email protected]
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