Michael McDonald

About Michael McDonald

T. Michael McDonald (age 63) is Executive Vice President and Business Group Director at First BanCorp (FBP), a role he has held since September 2012, with 40+ years across asset management, investment banking, and commercial banking; he is FINRA-registered as a Series 24 general securities principal and holds a Series 7 license . Corporate performance context for 2024: revenues $938M, GAAP net income $298.7M, EPS $1.81, ROAA 1.58%, and net interest margin 4.25% . The company’s pay framework links long-term incentives to tangible book value per share and relative TSR against the KBW Regional Bank Index; FBP’s cumulative TSR equated to $206 on an initial $100 investment since year-end 2019, grounding compensation outcomes in shareholder returns .

Past Roles

External Roles

• No public company directorships or external board roles disclosed for Michael McDonald in the proxy .

Fixed Compensation

• Not disclosed; Michael McDonald is an executive officer but not a named executive officer (NEO), and specific salary/bonus data is only reported for NEOs in the proxy .

Performance Compensation

• FBP’s executive program uses a balanced scorecard for short-term incentives (STI) and a mix of performance shares and time-vested restricted stock for long-term incentives (LTI); metrics balance profitability, asset quality, cost efficiency, and individual goals .

Corporate scorecard results for FY2024:

Long-term incentive design (program-level):

• Performance shares (50%) with a three-year cycle; payout based 50% on achieving a TBV per share goal ($15.51 threshold-to-max range) and 50% on relative TSR versus the KBW Regional Bank Index (25th→75th percentile scales to 50%→150%, capped at 100% if TSR is negative) .
• Time-vested restricted stock (50%) vests in equal tranches on the second and third anniversaries of grant .

Equity Ownership & Alignment

• Ownership guidelines: CEO must hold ≥5x base salary in FBP stock; other executive officers must hold ≥2x base salary; all directors and executive officers were in compliance as of the proxy date .
• Hedging/pledging: Directors and executive officers are prohibited from pledging FBP securities, short sales, margin accounts, or hedging transactions; insider trading policy governs trading behavior .
• Clawback: Mandatory recovery of erroneously awarded incentive-based compensation following GAAP restatements (Big R and little r) or executive fraud/gross misconduct, covering the prior three completed fiscal years .
• Insider selling pressure: McDonald filed one late Form 4 to report a disposition of Common Stock, indicating recent insider selling activity (details not itemized in the proxy) .

Employment Terms

Omnibus Incentive Plan treatment of awards on termination and change-in-control (program-level):

• Individual employment agreement terms (severance multiples, non-compete, etc.) are disclosed for NEOs only; no specific contract terms for McDonald are included in the proxy .

Performance & Track Record

FY2024 corporate performance context:

Compensation Governance, Peer Benchmarking, and Say-on-Pay

• Compensation best practices include multi-metric scorecards, discretion to adjust payouts for risk/compliance alignment, equity ownership requirements, anti-hedging/pledging, clawbacks, independent consultant (Pearl Meyer), and annual say-on-pay .
• Peer group used for benchmarking executive pay includes Ameris Bancorp (ABCB), Atlantic Union (AUB), BankUnited (BKU), Berkshire Hills (BHLB), Community Bank System (CBU), First Financial (FFBC), First Merchants (FRME), Fulton (FULT), Hancock Whitney (HWC), OFG Bancorp (OFG), Pinnacle Financial (PNFP), Renasant (RNST), Simmons (SFNC), TowneBank (TOWN), Trustmark (TRMK), UMB (UMBF), United Bankshares (UBSI), United Community Banks (UCBI), WesBanco (WSBC), and Popular, Inc. (BPOP) .
• 2024 say-on-pay approval: 95.09% support, signaling strong shareholder endorsement of the compensation framework .

Risk Indicators & Red Flags

• No related person transactions >$120,000 in FY2024; insider transactions (e.g., lending) were ordinary-course and on market terms .
• Hedging/pledging bans on executive/director trading reduce misalignment risk .
• No stock option grants; equity compensation consists of restricted stock and performance shares, avoiding option repricing risk .
• Clawback policy covers restatements and misconduct, mitigating adverse incentive outcomes .
• Two late Section 16 filings in 2024, including one by Michael McDonald for a stock disposition; monitor for timing around vesting windows and blackout periods for potential selling pressure signals .

Investment Implications

• Alignment: Ownership requirements, hedging/pledging bans, and robust clawbacks support strong pay-for-performance and risk governance; LTI metrics tied to TBV and relative TSR directly link management incentives to shareholder value .
• Performance linkage: 2024 exceeded EPS and efficiency targets and materially improved asset quality, supporting potential above-target STI outcomes across executives; LTI realizations will hinge on TBV delivery and TSR versus regional bank peers through 2026 .
• Trading signals: McDonald’s late Form 4 disposition indicates recent selling; while detail is limited, monitor future Form 4s for pattern formation and proximity to vesting dates or program windows to assess potential incremental supply pressure .
• Retention risk: Time-vested restricted stock and performance share structures foster retention; lack of disclosed individual contract terms for McDonald suggests reliance on program-level equity and corporate policies rather than bespoke severance economics, which may reduce golden-parachute optics but limits visibility into his personal change-of-control protections .