Juan Carlos Pavía
FIRST BANCORP /PR/About Juan Carlos Pavía
Juan Carlos Pavía, 44, is Executive Vice President and Chief Credit Officer at First BanCorp (FBP), serving in this role since May 2021 after previously serving as Senior Vice President and Chief Credit Risk Officer from 2014 to 2021 . He holds a bachelor’s degree in business administration from The George Washington University (2003) and led key initiatives including the Bank’s CECL adoption and integration of Santander’s commercial business, spanning 15+ years of credit risk, workout, operations, and asset-based lending experience in Puerto Rico financial institutions and government roles . Company performance in 2024 included $938M revenues, $298.7M GAAP net income, and 1.58% ROAA, which anchor quantitative incentive metrics used in his pay program; his 2024 short‑term incentive paid $338,393 based on EPS, pre‑tax pre‑provision income, non‑performing asset ratio, efficiency ratio, and individual scorecard performance . His long-term incentives vest on rigorous TSR vs KBW Regional Bank Index and tangible book value per share targets (TBV goal $15.51), reinforcing pay-for-performance .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| First BanCorp (FBP) | Senior Vice President & Chief Credit Risk Officer | 2014–2021 | Led CECL adoption; advanced credit risk and underwriting standards; integrated Santander’s commercial business |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| CAP Foundation (Puerto Rico) | Board of Directors | Since Dec 2022 | Non-profit governance supporting young oncology patients’ wellbeing |
| Caribbean Tennis Association | Board of Directors | 2005 | Community involvement |
Fixed Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | $400,000 | $425,000 | $462,116 |
| Christmas Bonus ($) | $1,200 | $1,200 | $1,200 |
| Base Salary Rate (as of 12/31/2024) | — | — | $475,000 (effective Apr 1, 2024) |
| All Other Compensation ($) | $27,180 | $37,847 | $31,929 |
| Perquisites Breakdown (2024) | Company‑owned Vehicles: $7,997; 1165(e) Plan Contribution: $4,633; Memberships & Dues: $10,540; Life Insurance: $762; Total: $23,932 |
Performance Compensation
2024 Short‑Term Incentive Plan Results
| Metric | % of Base Salary Achieved | Payout ($) | Notes/Vesting |
|---|---|---|---|
| Earnings Per Share | 11.33% | Included in total | Annual cash; pays based on corporate EPS |
| Pre‑tax, Pre‑Provision Income | 8.77% | Included in total | Non‑GAAP pre‑tax, pre‑provision income (see Appendix A) |
| Non‑Performing Asset Ratio | 9.00% | Included in total | Asset quality metric |
| Efficiency Ratio | 6.14% | Included in total | Operating efficiency metric |
| Individual Performance | 36.00% | Included in total | Leadership and scorecard achievements |
| Total | 71.24% | $338,393 | Achievement vs target: 118.70% |
Key individual performance highlights (credit/underwriting oversight, NPA reductions, commercial portfolio growth, origination platform rollout, strategic transactions) underpin the above payout .
Long‑Term Incentives (Granted March 21, 2024)
| Award Type | Grant Date | Shares/Units | Grant‑date Fair Value ($) | Performance Metrics | Vesting |
|---|---|---|---|---|---|
| Restricted Stock (Time‑vested) | Mar 21, 2024 | 9,829 | $170,533 | n/a | 50% on Mar 21, 2026; 50% on Mar 21, 2027 |
| Performance Shares (PSUs) | Mar 21, 2024 | Target: 9,828; Threshold: 4,914; Max: 14,742 | $180,737 (target) | 50% TSR vs KBW Regional Bank Index (50th percentile=100% target; 75th=150%; negative TSR capped at 100%); 50% TBV vs goal ($15.51; 80%=50%, 120%=150%) | Vests after 3‑year cycle ending Dec 31, 2026 |
Program design: 50% PSUs and 50% RS; dividends accrue and pay based on vested shares; aggregate grant values aligned to ~80.3% of base salary at target for Pavía (40.1% RS; 40.1% PS) .
2024 Vested Shares (realized value): 7,300 shares; $125,011 (2021 RS/PS and 2022 RS vestings) .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total Beneficial Ownership | 79,336 shares; less than 1% of outstanding common stock |
| Shares Outstanding (Record Date) | 163,126,093 |
| Ownership as % of Shares Outstanding | ~0.049% (79,336 / 163,126,093) |
| Unvested Time‑based Shares (12/31/2024) | 36,339 total: 2022 RS 4,458; 2022 PS earned 8,916; 2023 RS 13,136; 2024 RS 9,829 |
| Unearned PSUs Outstanding (12/31/2024) | 2023 PS: 13,135; 2024 PS (threshold): 4,914; total 18,049; market/payout values per table show $335,531 for equity plan awards |
| Upcoming Vesting Dates | 2022 RS remaining 50% vested Mar 24, 2025; 2023 RS: 50% Mar 16, 2025 and 50% Mar 16, 2026; 2023 PS: Mar 16, 2026; 2024 RS: 50% Mar 21, 2026 and 50% Mar 21, 2027; 2024 PS: Mar 21, 2027 |
| Stock Ownership Guidelines | Executives must hold ≥2x base salary; all NEOs in compliance |
| Hedging/Pledging | Prohibited for directors and Section 16 officers; no short sales/margin/hedging; pledging disallowed |
| Options | No option awards disclosed; equity grants consist of RS and PS |
Note: Beneficial ownership includes unvested shares subject to forfeiture under the Omnibus Incentive Plan; Pavía’s unvested inclusion equals 26,881 shares in the beneficial ownership table .
Employment Terms
| Term | Details |
|---|---|
| Employment Agreement | Effective May 1, 2021; 1‑year term; auto‑renews annually unless notice given ≥90 days prior to anniversary |
| 2024 Base Salary (Agreement) | $475,000 |
| Severance – Termination Without Cause | 12 months of then‑current base salary plus average of cash bonuses/incentives for last two completed calendar years; “for cause” excludes severance |
| Change‑of‑Control Economics | Potential benefits (as of 12/31/2024): Cash $1,526,930; Restricted Stock $509,794; Performance Shares $501,279; Total $2,538,003 |
| Termination Without Cause (Value) | Cash $763,465; Restricted Stock $509,794; Performance Shares $501,279; Total $1,774,538 |
| Equity Acceleration Terms | PSUs vest on death/disability; remain outstanding and vest per actual results on retirement; for resignation/termination for cause: forfeited; termination without cause: vests; change‑in‑control: vests upon voluntary or involuntary termination within one year (double trigger) |
| Clawback Policy | Recovers erroneously awarded incentive comp for Big R/little r restatements and intentional fraud/gross misconduct; applies to prior 3 fiscal years |
| Anti‑Hedging/Pledging | Prohibited for directors and Section 16 officers |
Investment Implications
- Pay-for-performance alignment: Short‑term incentives explicitly tied to profitability (EPS, PTPP), asset quality (NPA ratio), and efficiency; Pavía’s award exceeded target (118.7%) due to reductions in NPAs, commercial growth, origination platform deployment, and strategic deal execution—a constructive credit‑discipline signal for equity holders .
- Long‑term incentives: Balanced TSR relative to KBW Regional Bank Index and absolute TBV target ($15.51) drive multi‑year alignment; negative TSR cap at 100% mitigates windfall risk; equal weighting adds robustness to payout calibration .
- Ownership and trading pressure: Upcoming RSU/PSU vesting across 2025–2027 (with measurable share counts and dates) can create episodic supply but anti‑hedging/pledging policy and executive ownership guidelines (≥2x salary; in compliance) reduce misalignment and collateralization risk .
- Retention and transition: Auto‑renewing one‑year agreement with defined severance and double‑trigger CoC vesting provides moderate retention certainty; potential payout values are quantified and not excessive; Pavía’s promotion to COO effective Aug 1, 2025 (no changes to compensation plans/contracts), expanding his operational remit and influence without increasing contractual risk .
- Governance and shareholder support: Strong say‑on‑pay approval (95.09%) and independent Compensation Committee process using a peer group including Popular, Inc. support compensation governance quality and reduce pay inflation risk .
Appendices and References
- 2024 company performance metrics (revenues, net income, ROAA) .
- Executive biography and external roles .
- Beneficial ownership table (79,336 shares; <1%) ; shares outstanding .
- Short‑term incentive results table ; individual performance highlights .
- Grants of plan‑based awards (2024 RS/PS counts and values; vesting schedules) .
- Options exercised and stock vested (2024) .
- Employment agreements; severance; change‑in‑control values; equity acceleration terms .
- Ownership guidelines; anti‑hedging/pledging; clawback policy .
- Compensation peer group; say‑on‑pay results .
- COO succession 8‑K (June 16, 2025) .