Richard Sun
CATHAY GENERAL BANCORPAbout Richard Sun
Richard Sun, 72, is an independent director of Cathay General Bancorp (CATY) since 2017 and serves as President of SSS Development, Inc., a real estate investment, development, and management company. He holds a D.D.S. (Dentistry, 1982) and brings over 30 years of real estate investment experience and prior bank board service; he currently chairs CATY’s Compensation Committee and serves on the Nomination & Governance Committee . The Board has determined Mr. Sun is independent under Nasdaq rules .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| City of San Marino, CA | Mayor | 2012–2013; 2016–2017 | Civic leadership; also Council Member 2009–2017 |
| Trust Bank | Director | 1995–2004 | Bank governance experience |
| Omni Bank | Director | 2008–2009 | Bank governance experience |
| Methodist Hospital Foundation | Board Member; Chair | 2007–2016; Chair in 2013 | Philanthropy oversight |
| Los Angeles County Natural History Museum | Board of Governors | 2003–2017 | Cultural institution oversight |
| Chinese American Elected Officials | President | 2015–2017 | Association leadership |
| Economic Dev. Committee (Monterey Park); Design Review Committee (San Marino) | Committee Member | 2001–2004 | Municipal economic/design oversight |
External Roles
| Organization | Role | Tenure | Focus |
|---|---|---|---|
| Cathay Bank Foundation | Board Member | Current | Community philanthropy |
| USC Arcadia Hospital Foundation | Emeritus Board Member | Current | Healthcare philanthropy |
Board Governance
- Committee assignments:
- Compensation Committee: Chair
- Nomination & Governance Committee: Member
- Audit Committee: No longer served since May 2024
- Board/committee activity and attendance:
- Board held 7 meetings in 2024; each director attended >75% of aggregate Board and committee meetings; all current directors attended the 2024 annual meeting .
- Independent directors met in executive session six times in 2024 .
- Independence: The Board determined Mr. Sun (and all members of the Audit, Compensation, and Nomination & Governance Committees) meet applicable independence standards .
Fixed Compensation
| Component (2024) | Amount ($) | Notes |
|---|---|---|
| Fees earned or paid in cash | 125,000 | Includes annual director retainer ($55,000), committee chair fees ($10,000 for most chairs), and meeting fees ($750 per committee/special meeting or independent executive session); board meetings have no fee |
| Stock awards (grant-date fair value) | 84,999 | Annual director grant sized to ~$85,000 using closing price on April 12, 2024 |
| Total | 209,999 |
- Director compensation structure: non-employee directors receive a $55,000 cash retainer; $750 per committee/special meeting/executive session; $10,000 committee chair retainer (Audit chair $15,000); and an annual equity grant targeted at $85,000; no separate fee for regular bimonthly Board meetings .
Performance Compensation
- Directors do not receive performance-based bonuses; however, as Compensation Committee Chair, Mr. Sun oversees executive incentive design and outcomes:
- Short-term bonus metrics (2024): EPS, ROA, and individual/departmental performance; target bonus mix varies by NEO .
- Actual 2024 performance and payouts:
- EPS: Actual $3.95 vs target $4.45 → payout 77.53% for EPS component .
- ROA: Actual 1.22% vs target 1.35% → payout 80.74% for ROA component .
- Individual/Departmental ratings: 3.14–3.88 → payout 75%–120% for that component .
| Metric | Target | Actual | Payout % |
|---|---|---|---|
| EPS | 4.45 | 3.95 | 77.53% |
| ROA | 1.35% | 1.22% | 80.74% |
- Long-term incentive (LTI) structure for executives: performance RSUs with 3-year performance period, weighted 50% EPS, 25% relative TSR (vs KBW Regional Bank Index), 25% relative ROA (vs KBW Regional Bank Index); clawback applies .
- Example LTI outcomes for awards granted in 2022 (performance period ended 12/31/2024):
- EPS payout: 72.938%
- TSR payout: 125% (ranked 60th percentile among 46 peers)
- ROA payout: 150% (ranked 89th percentile among 46 peers)
Other Directorships & Interlocks
- Current public company directorships: None disclosed beyond CATY .
- Prior bank directorships: Trust Bank (1995–2004), Omni Bank (2008–2009) .
- Related-party exposure (RED FLAG): Office lease with Sun Rich Development I, LLC (jointly owned by Mr. Sun and immediate family via trusts); Cathay Bank pays rent and related fees for ~5,859 sq ft in Alhambra, CA; $196,955.52 paid in 2024; lease term to February 28, 2027 (assignment occurred with HSBC west coast retail acquisition) . Related-party transactions are reviewed under Board policies by the Audit Committee and governed by Regulation O and the Code of Ethics .
Expertise & Qualifications
- Real estate investment and development leadership (President, SSS Development, Inc.) .
- Financial institution board experience and governance (Trust Bank, Omni Bank) .
- Civic/government leadership (Mayor/Council Member; various boards/committees), providing stakeholder engagement and community insight .
- Education: D.D.S. (Dentistry) .
Equity Ownership
| Ownership Detail (as of 3/20/2025) | Shares | % of Outstanding |
|---|---|---|
| Total beneficially owned | 50,649 | <1% (does not exceed one percent) |
| Breakdown | Includes: spouse 1,100; JKLM LP 17,315; Sun Trust 17,834; Ivy Sun Separate Trust 4,200; RIS Family LP 5,800; Lin-Chih Corp 1,800; Michael Sun Trust 1,600 | — |
- Ownership guidelines: Directors must hold common stock equal to 3x annual cash retainer; all current directors meet or are within five-year grace period as of 3/20/2025 .
- Hedging/pledging: Prohibited for directors/officers without Board pre-approval; no approvals granted to date .
Compensation Committee Analysis
- Chair: Richard Sun; Members: Maan-Huei Hung, Joseph C.H. Poon, Shally Wang, Elizabeth Woo (VC of Audit also serves on Compensation) .
- Consultant: Frederic W. Cook & Co., Inc. (FWC) engaged as independent advisor; supports program design, peer benchmarking, and risk review; Compensation Committee determined FWC independence and no conflicts .
- Peer group management: Committee maintains an 18-bank peer set; updates included adding WSFS Financial and removing PacWest (post acquisition), aligning with CATY size (CATY assets $23.1B; market cap $3.3B as of 12/31/2024) .
- Risk controls: Annual review ensures incentives balance risk/reward, include clawbacks, and avoid earnings manipulation; clawback policy adopted Sept 2023 for accounting restatements .
SAY-ON-PAY & Shareholder Feedback
- 2024 advisory vote to approve executive compensation: 94.22% of votes cast in favor; Compensation Committee viewed this as support for decisions and policies .
Governance Assessment
- Strengths:
- Independent director with deep Compensation Committee experience; leads executive pay design emphasizing multi-year performance metrics and clawbacks .
- Board-level engagement with >75% attendance and participation in governance committees; independent sessions held regularly .
- Ownership alignment via stricter director stockholding guidelines (3x retainer), with compliance reported .
- Robust hedging/pledging prohibitions; no approvals granted .
- Strong say-on-pay support (94.22%), signaling investor confidence in pay practices overseen by the Committee .
- Risks/RED FLAGS:
- Related-party lease payments to Sun Rich Development I, LLC (jointly owned by Mr. Sun and family) totaling $196,955.52 in 2024—creates potential perceived conflict despite Audit Committee oversight; continued monitoring and disclosure warranted .
- Historical excise tax gross-up provisions remain in older change-in-control agreements for certain executives (not applicable to more recent agreements), which some investors view unfavorably; Compensation Committee policy trend has removed gross-ups in newer agreements .
- Independence maintained: Despite the lease, the Board affirmatively determined Mr. Sun’s independence under Nasdaq rules and committee independence requirements .
Overall: Mr. Sun’s chairmanship of the Compensation Committee and sustained governance engagement support Board effectiveness; the related-party office lease is a notable risk that the company mitigates through formal policies and committee review, but remains a perception issue investors should factor into governance risk assessments .