Eli S. Sepúlveda
POPULARAbout Eli S. Sepúlveda
Executive Vice President, Commercial Credit and Services Group at Popular, Inc. (Popular) and Banco Popular de Puerto Rico (BPPR); age 62. Sepúlveda has served as EVP of Popular since February 2010 and EVP of BPPR since December 2009, leading the Commercial Credit organization in Puerto Rico from January 2010 to April 2023 and, since May 2023, supervising the Commercial Credit and Services Group . Corporate context for his tenure: Popular delivered 2024 GAAP net income of $614.2 million and adjusted net income of $646.1 million (+10% YoY), with loans up 6% to $37.1 billion, NIM up 11 bps to 3.24%, nonperforming loans down 7 bps to 0.95%, and BPOP shares +15% in 2024, outperforming the KBW Regional Banking Index (+10%) and underperforming the Nasdaq Bank Index (+17%) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Popular, Inc. | Executive Vice President | Feb 2010–present | Senior leadership of corporate banking credit; current supervisory remit over Commercial Credit and Services Group |
| Banco Popular de Puerto Rico (BPPR) | Executive Vice President | Dec 2009–present | Executive leadership of BPPR; oversight of commercial credit activities |
| BPPR (Puerto Rico) | Supervisor in charge, Commercial Credit Group | Jan 2010–Apr 2023 | Led Puerto Rico Commercial Credit Group during period of transformation and credit discipline |
| Popular | Supervisor in charge, Commercial Credit and Services Group | May 2023–present | Expanded scope integrating services; enterprise collaboration across commercial credit and servicing |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Puerto Rico Idea Seed Fund, LLC | Board of Managers (Member) | Dec 2016–present | Support for entrepreneurial ecosystem and venture formation |
| Ricky Martin Foundation | Trustee | Nov 2020–Jun 2024 | Philanthropic governance; social impact initiatives |
Fixed Compensation
Popular does not disclose individual compensation for Sepúlveda (he is not a Named Executive Officer). Program-level structure for executive officers:
- Base salary generally targeted at market median; 2024 NEO base salaries unchanged except CFO due to promotion .
- Short-term incentive (STI) targets: CEO 135% of base; other NEOs 80% of base; payouts range 0–1.5x target, with threshold at 85% and stretch at 115% of target .
- Equity ownership guidelines for executive officers: 3x base salary within five years; prohibitions on hedging and pledging .
Short-Term Incentive Design and 2024 Corporate Achievement
| Component | Weight | Design Target/Payout Rules | 2024 Achievement (% of Target) |
|---|---|---|---|
| Adjusted Net Income | 35% | Threshold 85%; Stretch 115%; cap 1.5x target | 66% |
| Adjusted ROATCE | 15% | Threshold 85%; Stretch 115%; cap 1.5x target | 67% |
| Transformation Milestones (Strategic) | 25% | Collective milestones; same result applies to all NEOs | 107% |
| Individual Performance | 25% | Role-based financial/non-financial objectives; 0–1.5x target | Not disclosed for Sepúlveda |
Performance Compensation
Popular’s long-term incentive (LTI) program (applies to executive officers including Sepúlveda) balances time-based RS and performance shares tied to shareholder value creation:
- 50% RS: time-vested restricted stock, vests 25% annually over four years; grant sizing can vary 0–150% of target based on prior-year performance .
- 50% PSUs: 3-year performance shares with equal weighting to relative TSR (vs. U.S. banks $25–$500B assets) and absolute simple-average ROATCE; payouts from 0–1.5x target; dividend equivalents paid at end of cycle based on shares earned .
| Metric | Weight in LTI | Target Framework | 2024–2026 Vesting Cadence | Most Recent Completed Cycle Result |
|---|---|---|---|---|
| Relative TSR | 25% of total LTI (50% of PSUs) | Threshold 0.5x target; Max 1.5x target | Vests at first Committee meeting in Feb 2027, contingent on 2024–2026 results | 2022–2024 TSR 76th percentile → 150% of target shares |
| Absolute ROATCE (3-year simple average) | 25% of total LTI (50% of PSUs) | Threshold 0.5x target; Max 1.5x target | Vests at first Committee meeting in Feb 2027, contingent on 2024–2026 results | 2022–2024 ROATCE 11.88% → 94.38% of target shares |
| Time-vested Restricted Stock (RS) | 50% of total LTI | Four-year pro rata vesting at 25% per year | Annual vesting over four years from grant date | Not performance-based; program-level vesting only |
Combined PSU payout for 2022–2024 cycle: 122.19% of target shares plus dividend equivalents, demonstrating above-target long-term performance alignment .
Equity Ownership & Alignment
- Stock ownership guidelines: executive officers must hold Popular stock valued at 3x base salary within five years; CEO at 6x; directors at 5x retainer .
- Hedging and pledging prohibited for executive officers and directors; no speculative transactions (e.g., collars, swaps, forwards) permitted .
- Clawback policy applies to cash and equity variable pay (financial restatement and executive misconduct triggers; compliant with Exchange Act Rule 10D-1 and Nasdaq 5608) .
- Insider trading policy enforces trading controls; policy included in 2024 Form 10-K exhibits .
- Individual beneficial ownership for Sepúlveda is not itemized in the proxy; as a group, directors, nominees, NEOs, executive officers and the Principal Accounting Officer/Comptroller hold 1,545,834 shares (2.23% of outstanding) as of March 11, 2025 .
Ownership Guidelines and Restrictions (Program-Level)
| Policy | Requirement/Restriction | Source |
|---|---|---|
| Executive ownership guideline | 3x base salary within 5 years (CEO 6x) | Corporate Governance Guidelines; CD&A |
| Hedging/monetization ban | Prohibits collars, swaps, forwards; no speculative transactions | Corporate Governance Guidelines |
| Pledging ban | Prohibits pledging Popular securities as collateral | Corporate Governance Guidelines |
| Clawbacks | Restatement and misconduct triggers on cash/equity variable pay | CD&A |
Employment Terms
- No employment or change-in-control (CIC) agreements for NEOs; Popular states no special executive retirement or severance programs; applies corporate-wide policies under Omnibus Plans .
- Change-in-control treatment: double-trigger vesting; time-based awards vest on qualifying termination within two years post-CIC; performance awards deemed earned at greater of target or actual through CIC date, with time-based vesting to end of original cycle and acceleration on qualifying termination .
- Puerto Rico statutory severance (Law 80) for PR-based employees hired prior to Jan 26, 2017 (includes executive officers): formula-based severance if terminated without just cause .
Puerto Rico Law 80 Severance Schedule (PR-based employees hired before Jan 26, 2017)
| Tenure at Termination | Base Severance | Additional Weeks per Year of Service |
|---|---|---|
| <5 years | 2 months of compensation | +1 week per year |
| 5–15 years | 3 months of compensation | +2 weeks per year |
| >15 years | 6 months of compensation | +3 weeks per year |
Change-in-Control Equity Treatment (Omnibus Plans)
| Award Type | CIC Treatment | Vesting Mechanics |
|---|---|---|
| Time-based RS | Double-trigger: vests if terminated without Cause or for Good Reason within 2 years after CIC | Immediate vesting upon qualifying termination |
| Performance Shares | Earned at greater of target or actual through CIC; time-based vesting to original cycle end; accelerated vesting on qualifying termination | Contingent vesting; payout at cycle end unless accelerated |
Compensation Structure vs Performance Metrics
- STI metrics emphasize adjusted net income and adjusted ROATCE (50% combined weight), transformation milestones (25%), and role-based objectives (25%), with payout caps and thresholds to reinforce prudent risk-taking and alignment to shareholder value .
- LTI metrics drive multi-year alignment via relative TSR and absolute ROATCE, with 0–1.5x payout leverage and four-year RS vesting; recent 2022–2024 cycle paid 122.19% of target, evidencing above-target execution .
Vesting Schedules and Insider Selling Pressure
- RS vests 25% annually over four years; PSUs vest after 3 years subject to performance certification at February committee meetings (e.g., 2024–2026 cycle vests Feb 2027) .
- Popular prohibits hedging and pledging; insider trading policy in place; sales activity often relates to tax withholding or scheduled vests, but individual Form 4 activity for Sepúlveda is not covered in the proxy—monitor Section 16 filings for selling pressure signals .
Equity Ownership & Pledging
- Executive officers (including Sepúlveda) subject to 3x salary ownership guideline; pledging of Popular securities is prohibited, mitigating alignment risks associated with collateralized positions .
Employment Contracts, Severance, and Change-of-Control Economics
- No executive employment/CIC agreements; CIC equity vesting relies on plan-level double-trigger mechanics; Puerto Rico Law 80 provides statutory severance protection absent just cause, which can influence retention economics .
Performance & Track Record
- Corporate 2024 performance: adjusted net income +10%, loan portfolio +6% to $37.1B, stable credit quality, NIM +11 bps, TBV/share +14% to $68.16, BPOP +15% in 2024; these outcomes underpin Commercial Credit leadership performance context for Sepúlveda’s group .
Compensation Peer Group and Governance
- Compensation peer group includes large regionals (e.g., M&T, Regions, Huntington, Comerica, Webster); total compensation targeted at market median; independent compensation consultant engaged; 2024 say-on-pay approved by 95.6% of votes .
Investment Implications
- Alignment: Heavy weight on multi-year TSR and ROATCE, stock ownership requirements, clawbacks, and bans on hedging/pledging reduce agency risk and encourage durable value creation .
- Retention risk: Four-year RS vesting and 3-year PSU cycles create meaningful unvested equity, while Law 80 severance and absence of individual employment/CIC contracts shift protection to plan-level terms; retention appears supported by program design .
- Trading signals: With hedging/pledging prohibited, insider selling would most likely reflect scheduled vesting or diversification; no individual Form 4 analysis presented here—monitor filings for Sepúlveda to assess near-term selling pressure and timing around PSU certifications (Feb cycles) .
- Execution: Corporate credit quality stability and loan growth in 2024 provide favorable backdrop for Commercial Credit leadership; continued transformation and data/analytics initiatives may further enhance underwriting discipline and portfolio economics .