Bank of Valletta pays CEO Rick Hunkin €459,000

Bank of Valletta annual report remuneration policy reveals CEO salary

BOV CEO Rick Hunkin
BOV CEO Rick Hunkin

Bank of Valletta is paying its new CEO Rick Hunkin a total of €459,000 in salaries and bonus.

The former Northern Rock executive was appointed CEO of the bank in 2019, after being head-hunted by the bank as its first ever foreign CEO as opposed to picking rank-and-file executives.

The BOV remunation report reveals Hunkin is paid €350,000, apart from variable pay in cash and shares of some €41,000, €47,000 in benefits and €20,500 in directorial fees.

A base annual fee of €20,500 is paid to each director, including executive directors, and €80,000 is paid to the Chairman of the board.

BOV employees Miguel Borg and James Grech, a Labour candidate for Europe, sit on the board as non-executive directors, and are paid their directors fees on top of their salaries, respectively €149,000 and €65,000 each. Their total salaries amount to €215,000 for Borg and €92,000 for Grech after variable pay and other fees.

The assessment of the CEO’s performance was carried out by each non-executive director individually according to three criteria, for the first six months of his mandate. The performance and variable remuneration of the CEO was then reviewed by the BOV remuneration committee and recommended to the board for approval. Variable remuneration for Hunkin amounts to 12% of his fixed salary, excluding benefits. 50% of the variable remuneration is paid by way of BOV shares.

Hunkin’s first full year as BOV CEO coincided with the start of the COVID-19 pandemic, which saw BOV pre-tax profits fall to €15.2 million, and no dividends announced.

Banking regulators are not recommending the distribution of dividends, so as to ensure that BOV can meet the high demand on capital and support the Maltese economy till the end of the pandemic. The bank said it wants maximise shareholder value in the medium term, and restore the payment of dividends at levels that are adequate, stable and predictable. “The resumption of a steady dividend policy thus requires clarity on the outcomes of the COVID-19 event and the major litigation case, coupled with the successful implementation of the transformation strategy to generate sustainable profitability going into the future,” the bank said.

The most negative impact on the bank’s bottom line was a €39.8 million increase non-performing loans (NPLs) on aged non-performing debtors and €38.1 million in provisions related to COVID-19.

Englishman Hunkin was chief risk officer at Chetwood Financial from April 2019, and held the same role at his former post with Provident Financial, Royal Bank of Scotland Williams & Glyn unit, and Northern Rock. In 1998, Hunkin was a risk director for the National Bank of New Zealand, and later moved to Goldfish Bank and C&G plc, a joint venture where he managed Lloyd’s TSB’s interests. He moved to GE Money as chief risk officer in 2006, before arriving at Northern Rock in 2008 where he was hired to manage the renationalised bank until its return to private ownership. He then became chief risk officer and director of Tesco Bank in 2011, moving to RBS in 2014 and to Provident in November 2017, before his move to Chetwood earlier this year.