U.S. Authorities Consider Giving More Time To First Republic, Which Had Given Its Founder And Family Members A Whopping Payday Before Suffering A Crisis – First Republic Bank (NYSE:FRC)
U.S. authorities plan to give First Republic Bank FRC more time to ramp up its balance sheet and have yet to decide on what support, if any, to provide to the troubled lender, according to Bloomberg.
An expansion of the Federal Reserve’s offering is one of several options that is being weighed at this early stage, the publication reported, citing people familiar with the situation.
While any changes to the Federal Reserve’s liquidity offerings would apply to all eligible users, the adjustments could be designed to ensure that First Republic benefits from the changes.
Analysts and watchdogs reportedly see First Republic as stable enough to operate without immediate intervention; however, the company and its advisers are trying to work out a deal to shore up its balance sheet.
Even though First Republic has problems with its balance sheet, it has the cash to meet client needs as it explores solutions, sources told Bloomberg.
Read Also: First Republic Bank Rescue Deal May Depend On Government Entering The Picture: Report
The news comes amid reports that First Republic recently paid its founder James Herbert and his family millions of dollars.
In 2021, the bank reportedly paid Herbert $17.8 million, more than that of most CEOs at similarly sized banks, according to the Wall Street Journal. That year, the CEO of Bank of New York Mellon Corp BK was paid $9.3 million, and the CEO of Silicon Valley Bank received $9.9 million. In fact, Herbert’s salary that year was closer to the salaries of the CEO of US Bancorp USB, who was paid $19.1 million, and of the CEO of Citigroup Inc C, who was paid $20.5 million.
The Wall Street Journal additionally reported that, in 2021, Herbert’s brother-in-law earned $2.3 million for advisory work at the bank. First Republic also paid Herbert’s son $3.5 million to oversee a lending unit at the bank, according to the public disclosures the bank made during its annual filings.
When asked about the payments to family members, a spokesman told the Wall Street Journal that executive compensation in 2021 reflects that the company “outperformed industry peers and the S&P 500 from 2016 to 2021 and delivered strong shareholder returns.”
Herbert was the chief executive of First Republic before stepping into the executive chairman role in 2022.
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Photo: Can Pac Swire via flickr
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