Bank of Hawaii Corp. CEO Peter Ho received a pay package worth $7.9 million last year which was the highest for an executive of any publicly traded company in the state.
Ho’s compensation, which included $5.7 million in stock awards, was more than double the $3.6 million he earned in 2013, according to a proxy that the bank filed Friday with the Securities and Exchange Commission. Ho’s base salary was $794,424, up 5.2 percent from $754,847 a year earlier.
Connie Lau, president and CEO of Hawaiian Electric Industries Inc., was the second highest-paid executive with total compensation of $5.6 million last year, according to a 10-K filing made last month with the SEC.
Matson Inc. President and CEO Matt Cox was third with $4.1 million, according to the company’s recent proxy.
Just under half of Hawaii’s publicly traded companies have yet to file financial information with the SEC for their top executives, but based on 2013 data no Hawaii executives are expected to crack the top three of Ho, Lau and Cox.
Ho’s $5.7 million in stock awards included a one-time performance grant of 56,700 shares of restricted stock in recognition of the successful completion of the bank’s three-year strategic plan. Those shares were valued at $58.74 apiece and totaled just over $3.3 million. Ho, who also is chairman and president, received an additional 40,000 shares valued at just over $2.3 million which represented his annual performance-based equity grant.
"Bank of Hawaii’s CEO compensation is largely incentive- and performance-based," company spokesman Stafford Kiguchi said.
"In providing the grant (of 56,700 shares), the board’s Human Resources and Compensation Committee noted that appropriate remuneration for past performance had not fully been recognized, including the successful achievement of key milestones and metrics related to the implementation of the bank’s 2011-2013 strategic plan," Kiguchi added. "The committee also determined that compensation levels were below that of CEOs at companies of equal size and complexity with which the bank competes for human capital."
The value of the one-time stock grant is fully realized only if the company "continues to achieve rigorous performance-based thresholds and is subject to a four-year vesting schedule," Kiguchi said. "If these thresholds are not met, all or a portion of the grant may be forfeited."
Bankoh’s board noted that results of the recently completed strategic plan are supported by the bank’s ranking last year as the No. 1-performing large bank in the country in 2013 by ABA Banking Journal and No. 2 in the country in 2014 by Forbes magazine. Bank of Hawaii, which earned $163 million last year, is the second-largest bank in the state behind First Hawaiian Bank.
"The rankings speak to the consistent quality performance Bank of Hawaii has earned over recent years," Kiguchi said. "Bank of Hawaii enjoys some of the highest profitability, capital and stock market valuation metrics in the banking industry."
Ho’s total compensation also included $1.25 million in nonequity incentive plan compensation, $2,358 for change in pension value and nonqualified deferred compensation earnings, and $141,969 for all other compensation.
