José R. Fernández
About José R. Fernández
José R. Fernández, age 61, is President, CEO and Chairman of OFG Bancorp and Oriental Bank, serving as CEO since 2004 and Chairman since May 2024, with over 30 years in financial services and a 20-year tenure leading OFG’s transformation via acquisitions (Eurobank 2010, BBVA Puerto Rico 2012, Scotiabank Puerto Rico 2019) and a digital-first strategy delivering record loan production, earnings, and shareholder returns; he holds a BA from Notre Dame and an MBA from Michigan Ross, and was named American Banker’s 2023 Community Banker of the Year . Under his leadership, 2024 delivered EPS of $4.23, core revenues of $709.6M, and tangible book value per share of $25.43, with strong multi-year pay-versus-performance alignment as TSR rose to a 2024 value of $202.10 per $100 initial investment and net income reached $198.2M .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| OFG Bancorp | CEO (later CEO & Chairman) | 2004–present | Led three bank acquisitions (2010, 2012, 2019) and digital-first strategy driving record financials |
| Oriental Bank (subsidiary) | Chairman | Ongoing | Oversight of principal banking subsidiary; credit and trust committees at bank-level support risk governance |
| Various OFG subsidiaries | Chairman of Boards; President (Oriental Insurance LLC, Oriental International Bank, Inc.) | Ongoing | Strategic oversight across insurance and international banking |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Federal Home Loan Bank of New York | Director | Elected 2024 | Represents PR and USVI institutions |
| University of Notre Dame (Mendoza) | Business Advisory Council Member | Ongoing | Advisory engagement |
| Puerto Rico Conservation Trust | Advisory Board Member | Ongoing | ESG/community involvement |
| Hispanic Society Museum and Library | Board of Trustees | Ongoing | Cultural governance |
Fixed Compensation
| Component | 2024 Terms | Notes |
|---|---|---|
| Base Salary | $981,750 | 5% increase from $935,000 in 2023 |
| Target Annual Bonus | 100% of base salary | Increased from 90% for 2023 bonus payable in 2024 |
| Actual 2024 Bonus Paid | $1,004,723 | Based on company scorecard |
| Annual Expense Allowance | $100,000 | Car, memberships, other duty-related expenses |
| Life Insurance | $3,000,000 10-year term policy (additional to standard NEO coverage) | CEO-specific additional policy |
| Fringe/Other | $209,132 (2024) including dividends on performance shares, 401(k) match, insurance premiums | See Summary Compensation Table footnotes |
Performance Compensation
Annual Bonus – 2024 Corporate Scorecard and Payout
| Metric | Weight | Target Achievement (%) | Score (weighted) |
|---|---|---|---|
| Market Share Operating Income 1 | 10 | 100.61% | 10.06 |
| Market Share Operating Income 2 | 10 | 100.04% | 10.00 |
| Deposit Growth | 15 | -16.10% | 0.00 |
| Customer & Digital Adoption | 20 | 174.70% | 34.94 |
| Texas Ratio | 15 | 114.54% | 17.18 |
| Efficiency Ratio | 30 | 100.52% | 30.16 |
| Total | — | — | 102.34 |
| Executive | Target Bonus % | Performance Score | Performance Bonus ($) |
|---|---|---|---|
| José R. Fernández | 100% | 102.34 | $1,004,723 |
Long-Term Incentives (Equity)
| Award Type | Grant Date | Shares/Units | Grant Date Fair Value ($) | Key Terms |
|---|---|---|---|---|
| Special Retention RSUs | 1/1/2024 | 40,442 | $1,500,000 | Time-based; lapsed in thirds annually starting 1/1/2025 |
| Special Retention PSUs | 1/1/2024 | 40,442 | $1,500,000 | Performance-based (2024–2026 cycle) |
| Annual RSUs | 2/23/2024 | 15,450 | $555,119 | Time-based; lapsed in thirds starting 2/23/2025 |
| Annual PSUs | 2/23/2024 | 15,450 | $555,119 | Performance cycles end 12/31/2024, 12/31/2025, 12/31/2026 (various blocks) |
| 2025 LTIP (for 2024 performance): RSUs | Approved 2025 | 14,120 | $589,510 | 50% of LTIP value in RSUs |
| 2025 LTIP (for 2024 performance): PSUs | Approved 2025 | 14,120 | $589,510 | 50% of LTIP value in PSUs; 3-year cycle ending 12/31/2027 |
Performance Share Metrics (2025 awards, 3-year cycle):
| Metric | Threshold | Target | Maximum |
|---|---|---|---|
| Tangible Book Value (TBV) per share at 12/31/2027 | $30.38 | $31.97 | $33.57 |
| 3-Year Average ROATCE | 13.58% | 14.30% | 15.01% |
Program Design Features: 50% payout at threshold; up to 150% at max; straight-line interpolation; TBV targets adjusted for distributions and extraordinary events; double-trigger for equity vesting upon change-in-control; no stock options granted .
Equity Ownership & Alignment
Beneficial Ownership and Guideline Compliance
| Item | Amount | Notes |
|---|---|---|
| Beneficially owned common shares | 273,951 | Includes 32,163 restricted units vesting within 60 days, 14 shares via 401(k)/1081.01(d), and 7,000 shares owned by spouse |
| Ownership as % of shares outstanding | <1% | 45,440,269 shares outstanding at 12/31/2024 |
| Qualifying common stock (for ownership policy) | 455,736 | Total value $19,286,739; 19.65x compensation vs 5.00x minimum for CEO |
| Hedging/Pledging | Prohibited | Insider Trading Policy forbids derivatives, hedging, and pledging |
Outstanding Equity and Vesting Schedule (as of 12/31/2024)
| Type | Not Vested (#) | Market Value ($) | Cycle/Restriction Details |
|---|---|---|---|
| RSUs | 196,824 | $8,329,608 | Thirds vest: 40,442 (start 1/1/2025); 15,450 (start 2/23/2025). Halves vest: 13,567 (start 2/21/2025); 6,750 (start 2/22/2025) |
| PSUs (unearned) | 24,123 | $1,020,887 | Cycles end 12/31/2024 (20,250), 12/31/2025 (20,350), 12/31/2026 (55,892) across grants |
Stock Ownership Policy: CEO must hold ≥5x base salary; other NEOs 3x; directors 4x of annual cash compensation; compliance tracked and enforced .
2024 Stock Vested
| Item | Shares Acquired on Vesting | Value Realized ($) |
|---|---|---|
| 2024 RSU/PSU vesting | 86,675 | $3,259,680 |
Employment Terms
| Term | Key Provision | Economics |
|---|---|---|
| Employment Agreement | Amended and restated 12/21/2023; effective 1/1/2024; term ends 12/31/2026; CEO reports to Board; Board nominates and recommends re-election during term | Base salary $981,750; target bonus % set by Compensation Committee; annual expense allowance $100,000; eligibility for equity awards up to % of base; optional deferred cash equivalents if in compliance with ownership policy; special one-time award of 40,442 RSUs and 40,442 PSUs |
| Severance (no CIC) | Termination without just cause or for good reason (as defined) | Lump-sum equal to 3x (base salary + average of last two cash bonuses) |
| Change-in-Control (CIC) | CIC followed by termination within 1 year | Cash equal to 3x (base salary at termination + last cash bonus) ; estimated 2024 CIC cash compensation $5,959,419 |
| Clawback Policy | Applies to incentive compensation upon accounting restatement or material non-compliance | Recoup incentive comp from prior 3 years to extent based on misstated financials |
| Non-qualified Deferred Compensation | Plan re-established in 2023; unfunded; executives may defer up to 100% salary/bonus; distributions taxable upon withdrawal | 2024 table shows CEO aggregate earnings of $11,484 and withdrawals/distributions of $1,584,235 |
Board Governance
- Board Structure: 9 members; CEO is only non-independent director; roles of Chair and CEO combined in May 2024 with Lead Independent Director (Néstor de Jesús) appointed to mitigate dual-role concerns .
- Committees: Audit (Chair: Rafael Vélez), Risk & Compliance (Chair: Néstor de Jesús), Compensation (Chair: Jorge Colón-Gerena), Corporate Governance & Nominating (Chair: Susan Harnett); all independent .
- Executive Sessions: Regular meetings of non-management directors presided by Lead Independent Director .
- Board meetings in 2024: 6; CEO attendance 6 of 6 (100%) .
- Director Compensation: CEO receives no director fees; director pay comprises cash retainers and annual RSU grants; Lead Independent Director receives higher retainer .
Board Service — José R. Fernández
| Role | Meetings | Attendance |
|---|---|---|
| Board (Chair) | 6 (2024) | 100% |
Director Compensation
| Item | Amount |
|---|---|
| Director fees for CEO/Chairman | Not paid (compensated per Employment Agreement only) |
Compensation Peer Group (for benchmarking)
Amerant Bancorp; BancFirst; Byline Bancorp; Eagle Bancorp; FB Financial; First Bancorp (NC); First BanCorp (PR); First Commonwealth; First Financial Bankshares; Lakeland Bancorp; NBT Bancorp; Premier Financial; QCR Holdings; Renasant; Sandy Spring; Seacoast; ServisFirst; S&T Bancorp; Tompkins; Univest .
Say-on-Pay & Shareholder Feedback
- 2024 advisory vote support: 98% approval .
- 2025 annual meeting: Executive compensation approved with 35,472,835 For, 2,978,652 Against, 47,397 Abstain; directors re-elected; auditor ratified .
Related Party Transactions
- Delgado & Fernández, LLP (principal partner is CEO’s brother) provided legal services; Company paid $1,839,686 (legal) and $501,785 (notarial fees paid by clients) in 2024; engagement approved by Board under related party policy .
- SBIC partnership commitment where former Chair’s son is among the general partner group; approved by disinterested Board members .
Risk Indicators & Red Flags
- Combined CEO/Chair role increases concentration of decision rights; mitigated by Lead Independent Director, independent committees, and annual Board self-evaluation .
- Related party legal services present conflict risk; managed through formal policy and Board approval .
- Hedging/pledging prohibited, reducing alignment risks associated with collateralized positions .
- No stock options granted; no repricing; no excise tax gross-ups; change-in-control equity is double-trigger, aligning with governance best practices .
Performance & Track Record
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| EPS (diluted) | $3.46 | $3.85 | $4.23 |
| Net Income ($000) | 166,239 | 181,172 | 198,170 |
| TBV per share (year-end) | — | $23.13 | $25.43 |
| TSR — value of $100 investment | $124.45 | $174.51 | $202.10 |
Multi-Year CEO Compensation
| Year | Salary ($) | Stock Awards ($) | Non-Equity Incentive ($) | All Other ($) | Total ($) |
|---|---|---|---|---|---|
| 2022 | 935,000 | 1,129,545 | 872,200 | 124,762 | 3,061,507 |
| 2023 | 935,000 | 1,197,394 | 1,188,300 | 168,781 | 3,489,475 |
| 2024 | 981,750 | 4,110,237 | 1,004,723 | 209,132 | 6,305,842 |
Employment Contracts, Severance & Change-of-Control Economics
- Employment Agreement: through 12/31/2026; includes special 2024 retention equity awards and defined severance mechanics .
- Severance (no CIC): 3x salary plus average of last two bonuses (lump sum) if terminated without just cause or for good reason .
- CIC Cash: 3x salary + last cash bonus; estimated $5,959,419 for 2024 .
- Equity upon CIC: double-trigger vesting only .
Equity Ownership & Pledging
- CEO exceeds stock ownership guideline (19.65x vs 5x requirement) .
- Hedging and pledging of company securities prohibited for executives and directors .
Compensation Structure Analysis
- Mix shift: Significant one-time equity award in 2024 increased equity portion; otherwise program emphasizes variable, performance-based pay .
- No stock options; exclusively full-value RSUs/PSUs with multi-year vesting; enhances retention and alignment .
- Performance metrics maintained; weighted scorecard balances growth, agility, resiliency, operating leverage with explicit targets and scores .
- Say-on-pay support at very high levels in 2024 and 2025, indicating investor acceptance .
Investment Implications
- Alignment and retention: Strong ownership, prohibition on pledging/hedging, and multi-year performance equity with explicit TBV/ROATCE targets point to high alignment and low near-term retention risk; CEO employment secured through 2026 with double-trigger CIC equity structure .
- Insider supply overhang: Material RSU tranches vesting annually starting 1/1/2025 and 2/23/2025 could create incremental sell pressure around vest dates, though ownership policy and prohibition on hedging/pledging may temper net dispositions .
- Governance: Combined CEO/Chair role is mitigated by a robust independent committee structure and Lead Independent Director, but related party legal services require ongoing monitoring for perceived conflicts .
- Pay-for-performance: High TSR, rising EPS/TBV, and transparent scorecard support continued investor confidence in compensation design; CIC cash payout at 3x is market-typical but sizable, relevant for M&A scenarios .