Cassan Pancham
FIRST BANCORP /PR/About Cassan Pancham
Cassan Pancham, age 64, is Executive Vice President and Business Group Executive at First BanCorp (FBP). He has served in this role since October 2005, overseeing Mortgage Banking, FirstBank Insurance Agency LLC, and the Eastern Caribbean region; previously he held senior roles at Chase/J.P. Morgan in the Caribbean dating back to 1985, including Vice President and General Manager of JP Morgan Chase’s Eastern Caribbean Region Banking Group (1999–2002) . Company performance during his tenure has been strong: in 2024 FBP delivered $938M in revenues, $298.7M in GAAP net income, ROAA of 1.58%, and returned ~100% of earnings via buybacks/dividends; capital ratios remain robust (CET1 16.3%) . Over 2020–2024, cumulative TSR rose from a $100 base to $206, with CAP linked to measures like pre-tax, pre-provision income, EPS, NPA ratio, and efficiency ratio .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| JP Morgan Chase Eastern Caribbean Region Banking Group | Vice President & General Manager | 1999–Oct 2002 | Led regional consumer/retail operations; senior oversight across Caribbean units . |
| Chase Manhattan Bank Caribbean business units | Various management roles | 1985–1999 | Progressive leadership roles across Caribbean banking operations . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Virgin Islands Port Authority | Governing Board Director; Chair | Director from Jun 2007; Chair Jan 2008–Jan 2011 | Public-sector governance; chaired board during critical infrastructure oversight period . |
Fixed Compensation
| Year | Base Salary ($) | Bonus ($) | All Other Compensation ($) | Notes |
|---|---|---|---|---|
| 2022 | 450,000 | 1,200 (Christmas bonus) | 95,538 | Housing/utilities ($72,000/$5,764) and retirement plan contribution ($7,500) included; life insurance premium excess $756 . |
| 2021 | 450,000 | 1,200 (Christmas bonus) | 98,907 | Housing/utilities $72,500/$5,436; plan contribution $7,500; life insurance $695 . |
| 2020 | 467,308 | 91,200 (special integration/other award) | 88,208 | Pay period leap year increased salary cash paid; housing $66,000; plan contribution $7,500 . |
Performance Compensation
| Year | Short-Term Incentive ($) | Design | Metric Detail (as % of Base Salary) | Vesting |
|---|---|---|---|---|
| 2022 | 194,727 | Balanced scorecard tied to profitability, asset quality, risk, and individual goals . | Adjusted Net Income 8.88%; PTPP Income 8.34%; NPA Ratio 3.55%; Classified Assets 5.01%; Individual Performance 17.50%; Total 43.28% of base . | Cash payout; paid based on annual results . |
Long-Term Incentives (2022 grant; granted March 24, 2022)
| Instrument | Grant Value ($) | % of Base Salary | Shares/Units | Performance Metrics | Vesting Schedule |
|---|---|---|---|---|---|
| Restricted Stock | 123,754 | 27.5% | 9,411 | Time-based | 50% on 2nd anniversary; 50% on 3rd anniversary of grant . |
| Performance Shares | 123,742 | 27.5% | 9,410 target | Tangible Book Value per share target $12.93 (threshold 80%, target 100% payout) over 2022–2024 cycle . | Cliff vest at end of 3-year performance period based on TBV goal achievement . |
Note: FBP updated its LTI design for subsequent grants to weight performance shares 50% relative TSR vs KBW Regional Bank Index and 50% TBV, with vesting at 3 years and RS time-based vesting in equal tranches at 2 and 3 years .
Equity Ownership & Alignment
| As-of Date | Beneficial Ownership (Shares) | % of Shares Outstanding | Notes |
|---|---|---|---|
| Mar 25, 2024 | 285,880 | <1% | Includes unvested Omnibus Plan shares subject to forfeiture (31,303) . |
| Mar 22, 2023 | 279,818 | <1% | Includes unvested Omnibus Plan shares subject to forfeiture (32,880) . |
- Executive stock ownership guidelines require 2x base salary for executive officers; FBP reports all executive officers are in compliance .
- Pledging/hedging of company securities is prohibited for directors and executive officers, reducing alignment risks from collateralized positions or short-term speculation .
- Insider trading filings indicate activity around vesting cycles (e.g., Form 4 filings on Mar 18, 2025 and May 21, 2025), consistent with equity vesting/withholding practices; investors should monitor March and May windows for tax-related dispositions or PSU settlements .
Employment Terms
| Term | Detail |
|---|---|
| Agreement Effective Date | May 31, 2018; base salary $450,000 in 2022; 1-year term with automatic annual renewals unless notice given ≥90 days before anniversary . |
| Termination Without Cause | Cash severance equal to 12 months of then-current base salary plus average cash bonuses/incentives for the prior two calendar years (Act 80 statutory severance may apply; table shows cash payments for Mr. Pancham under Act 80) . |
| Change-in-Control (Double Trigger) | If terminated without cause within two years following a change in control: lump-sum equal to 2x base salary plus 2x average cash bonuses/incentives for prior two calendar years . |
| Equity Treatment on Separation | Unvested restricted stock: vests upon death, disability, retirement, termination without cause, and within one year post-CIC; forfeited upon resignation or termination for cause . Performance shares: vest upon death/disability; remain outstanding through cycle upon retirement (settle on results); vest upon termination without cause and within one year post-CIC; forfeited upon resignation/for cause . |
| Disability Benefits | Corporate-wide disability plan; monthly benefits capped at $15,000 for a period keyed to age at disability; examples provided for executives in 2022 table . |
| Clawback Policy | Robust clawback of incentive-based pay for intentional fraud, gross misconduct, or material financial restatements . |
Performance & Track Record
| Period | Indicator | Data |
|---|---|---|
| FY 2023 | Top-performing bank stock in KBW Nasdaq Regional Banking Index (TSR) | Returned close to 100% of earnings via buybacks/dividends; repurchased $200M stock . |
| FY 2024 | Revenues $938M; Net Income $298.7M; ROAA 1.58%; CET1 16.3% | Distributed ~100% of earnings via buybacks/dividends; continued capital strength . |
Compensation Structure Analysis
- Pay mix reflects meaningful at-risk compensation: short-term and long-term incentive components linked to profitability, asset quality, and strategic execution, with LTI split between performance shares (TBV/relative TSR) and time-based RS, supporting retention and stockholder alignment .
- Year-over-year evidence of steady cash compensation with moderate equity grants; 2022 STIP payout at 108% of target for Pancham (43.28% of base), consistent with strong corporate and individual results .
- No option repricing disclosed; equity awards follow defined metrics and vesting schedules with clear forfeiture/acceleration rules .
Risk Indicators & Red Flags
- Pledging/hedging: Prohibited for execs/directors, mitigating alignment risk .
- Related party transactions: Governed by a formal policy with Board/Audit oversight; extensions of credit to insiders must be on market terms and subject to Regulation O approvals .
- Say-on-pay support: 95.09% approval in May 2024, indicating broad shareholder endorsement of compensation practices .
- Insider transactions: Form 4 activity around vesting periods indicates potential selling pressure tied to tax withholding/settlement; monitor standard open-window periods .
Equity Ownership Guidelines & Compliance
- Executive stock ownership policy: CEO at 5x base salary; other executive officers at 2x base salary; FBP reports full compliance by executives (including Pancham) as of 2024–2025 .
- Director and executive prohibitions on pledging/hedging further reinforce long-term alignment .
Investment Implications
- Alignment: Pancham’s compensation is predominantly variable via STIP and PSUs/RS, tied to core bank value drivers (PTPP income, asset quality, TBV, TSR), aligning incentives with shareholder returns .
- Retention: Auto-renew employment agreement with standard severance and double-trigger CIC economics (2x salary plus 2x bonus average) moderates retention risk without excessive golden parachute exposure; equity acceleration on death/disability/retirement/No Cause and CIC supports continuity but warrants calendar monitoring of vesting windows .
- Trading Signals: Expect recurring Form 4 activity around March (2nd/3rd anniversary RS vest dates and PSU cycle ends, e.g., 2022–2024 in Mar 2025), potentially generating tax-withholding sales; monitor windows for short-term technical pressure in FBP shares .
- Governance: Strong clawback, ownership guidelines, and prohibition on hedging/pledging reduce governance red flags; high say-on-pay support augments confidence in pay practices .