William Fallon
About William Fallon
William C. Fallon is MBIA’s Chief Executive Officer (since September 15, 2017) and a Director (since May 2017); he is age 65 and has served as an executive officer since July 2005. Prior roles include President, Chief Operating Officer, head of Global Structured Finance, and earlier Vice President and head of Corporate and Strategic Planning; prior to MBIA, he was a Partner and co-leader of McKinsey’s Corporate Finance & Strategy Practice . Performance context in 2024 featured an Adjusted Book Value per share decline to $13.79 from $17.66 year-over-year and an interim TSR of -3.1% for the 2023–2025 performance cycle as of December 31, 2024, reflecting ongoing runoff and elevated losses at operating subsidiaries . Fallon beneficially owns 2,637,516 shares (5.24% of outstanding), materially aligning his incentives with shareholders .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| MBIA Inc. | Vice President; Head of Corporate & Strategic Planning | Jul 2005 – Mar 1, 2007 | Led corporate and strategic planning during transition into structured finance focus . |
| MBIA Inc. | President; Chief Operating Officer; Head of Global Structured Finance | Pre-2017 (prior to CEO appointment) | Oversaw operations and structured finance portfolio management before elevation to CEO . |
External Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| McKinsey & Company | Partner; Co-leader, Corporate Finance & Strategy Practice | Pre-2005 | Led advisory on corporate finance and strategy, relevant to MBIA’s portfolio and capital decisions . |
| National Public Finance Guarantee Corp. (MBIA subsidiary) | President & CEO | Current | Direct oversight of National’s public finance insured portfolio and remediation outcomes . |
Fixed Compensation
Multi-year CEO compensation (proxy-reported):
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | 900,000 | 900,000 | 900,000 |
| Stock Awards ($) | 1,575,000 | 1,575,000 | 1,743,688 |
| All Other Compensation ($) | 306,800 | 13,309,688 | 312,800 |
| Total Compensation ($) | 4,005,800 | 17,140,688 | 3,904,488 |
Key features:
- Stock ownership guideline: CEO 7x base salary; as of March 12, 2025, Fallon exceeded the guideline .
- Clawback: Executive compensation clawback policy revised in July 2023 to align with listing standards; no clawback actions in 2024 .
Performance Compensation
2024 annual incentive structure and outcomes:
| Item | Target | Actual | Payout |
|---|---|---|---|
| CEO Target Bonus % (of base) | 133% | — | — |
| CEO Target Bonus ($) | $1,200,000 | — | — |
| CEO Actual Bonus Paid ($) | — | $948,000 | 79% of target |
2024 Annual Incentive Scorecard (weights and performance):
| Area | Weight of Total | Performance Level | Contribution to Outcome |
|---|---|---|---|
| National (Portfolio remediation incl. PREPA) | 31% | Below target (PREPA delays, higher losses) | 75% of target |
| MBIA Insurance (Runoff, remediation) | 15% | Mixed (reduced distressed exposure; limited recoveries on Zohar) | 77% of target |
| Corporate (MBIA Inc. Liquidity) | 8% | Above target (liquidity optimization) | 138% of target |
| Enterprise Objectives | 46% | Mixed: ABV under target; expenses above plan; people management strong | 74% of target |
| Overall Formulaic Outcome | 100% | — | 79% of target |
Long-term incentives:
- Time-based equity grants vest equally at 3/4/5 years; 2024 grants were entirely time-vested equity due to lack of reliable quantitative metrics in runoff context .
- 2022–2024 performance-based shares (issued in early 2022) forfeited at threshold due to stock price not exceeding performance hurdle; Fallon forfeited 75,761 shares (grant-date value $1,050,000) .
Equity Ownership & Alignment
Beneficial ownership and guidelines:
| Item | Value |
|---|---|
| Shares beneficially owned | 2,637,516 |
| % of shares outstanding | 5.24% (based on 50,370,625 shares) |
| Options acquirable within 60 days | 0 |
| Ownership guideline | 7x base salary; exceeded as of Mar 12, 2025 |
| Stock holding policy | After meeting guideline, may divest up to 25% of excess per 12 months while employed |
| Pledging/Hedging disclosure | Proxy/10-K sections reviewed do not indicate pledging by Mr. Fallon; insider trading policy updated Jan 15, 2025 governs 10b5-1 plans and blackout periods |
Representative outstanding/vesting equity (as of 12/31/2024):
| Grant/Type | Units | Market Value at 12/31/24 ($6.46) | Vesting Schedule |
|---|---|---|---|
| 11/8/2018 Time-based RS | 1,000,000 | $6,460,000 | Cliff vest on 3/3/2025 (cont. employment) |
| 3/3/2020 Time-based RS | 22,068 | $142,559 | Vests on 5th anniversary of grant |
| 2/20/2024 Dividend-related RS | 16,611 | $107,307 | Follows 3/4/5-year schedule of 3/4/2021 perf. shares |
| 3/4/2024 Time-based RS (LTI) | 243,431 | $1,572,564 | Equal tranches at 3/4/5 years post-grant |
| 3/3/2023 Performance RS (at target) | 67,163 unearned | $0 at 12/31/24 (interim TSR -3.1%) | Earned shares vest 3/4/5 years; performance period ends 12/31/2025 |
Note: Additional smaller tranches (e.g., 39,414; 42,135; 46,604 units) are disclosed with respective values; vesting follows time- or performance-based schedules as footnoted in the proxy .
Employment Terms
| Provision | Key terms |
|---|---|
| Retention award (one-time cash) | $3,500,000 to Fallon; cliff vests March 1, 2028; early vest upon qualifying termination (death/disability; without cause upon change of control; Board-approved termination upon change of control); forfeiture upon voluntary resignation/retirement or termination for cause . |
| Severance/change-of-control (KEEP Plan) | If termination following change in control: cash severance $4,380,000; immediate vesting of time-based RS; performance RS vest per performance score; retirement benefits $400,000; healthcare $91,314; total illustrative value $14,925,510 at $6.46/share (as of 12/31/2024) . |
| Retirement-eligibility treatment | Immediate vesting of outstanding time-based RS; performance RS continue to vest per original terms; accounting accelerates expense recognition to retirement-eligible date . |
| Clawback | Executive compensation clawback revised July 2023 to comply with listing standards; authority to recover erroneously awarded compensation on restatement; no clawbacks executed in 2024 . |
| Insider trading policy | Updated Jan 15, 2025; governs 10b5-1 plans, blackout periods, Form 4 reporting within two business days, restrictions on amendments during blackout; retirement plan blackout suspends senior official trading . |
Board Service and Governance
- Board service: Director since May 2017; Executive Committee member; not independent (executive director) .
- Committees: Executive Committee (members: Gilbert, Fallon, Shasta, Vaughan; did not meet in 2024); Finance & Risk, Compensation & Governance, and Audit Committees are fully independent with designated financial experts; Board met five times in 2024 and all directors met attendance requirements .
- Dual-role implications: CEO + Director (not Chair). Independence maintained through majority-independent board and independent committee oversight of compensation and audit; CEO compensation approved by Board with C&G Committee recommendations .
Investment Implications
- Alignment and retention: High insider ownership (5.24%) and stock ownership guideline compliance support alignment; the $3.5M cash retention award vesting in 2028 indicates board-perceived retention risk and aims to preserve institutional knowledge through the PREPA resolution and strategic alternatives .
- Pay-for-performance signals: 2024 bonus paid at 79% of target, directly tied to a quantified scorecard; forfeiture of the 2022–2024 performance RS demonstrates rigorous thresholds amid runoff and loss volatility; 2025 LTI continues as time-based RS due to lack of reliable metrics, shifting risk away from performance equity to retention equity .
- Trading pressure watch-outs: The 1,000,000-share cliff vest on March 3, 2025 and other vesting tranches could create episodic supply; however, holding requirements beyond guideline compliance and blackout policies may moderate immediate selling; monitor Forms 4 around vest dates .
- Governance and risk oversight: Independent committees and explicit clawback framework mitigate governance concerns from dual-role status; persistent PREPA/Zohar outcomes drive ABV and TSR variability, a core execution risk under Fallon’s oversight .