--Stephen Crawford to join Capital One as CFO designate
--CFO Perlin to step down in May, will stay as a senior adviser
to CEO until February 2014
--CEO Fairbank: Perlin is 'leaving our financial house in good
order'
(Adds Mr. Crawford's compensation in 16th and 17th
paragraphs.)
By Matthias Rieker
Capital One Financial Corp. (COF) said Friday Chief Financial
Officer Gary Perlin will retire in May, and former Morgan Stanley
(MS) CFO Stephen Crawford will join the bank to succeed him.
Mr. Crawford, who rose to co-president at Morgan Stanley under
former Chief Executive Philip Purcell, has advised Capital One for
several years on financial and strategic matters. Mr. Crawford, 48,
will join Capital One Monday as CFO designate.
Mr. Perlin plans step down May 24 after turning 62 years old
that month. He will stay until February 2014 as a senior adviser to
Chairman and CEO Richard Fairbank, 62.
Sanford C. Bernstein & Co analyst Kevin St. Pierre called
the hiring a "positive" and said Capital One "may have also found
the heir apparent to Rich Fairbank." A Capital One spokeswoman said
Mr. Fairbank doesn't have any plans to retire.
Shares of Capital One rose 0.3% Friday to $56.50. The stock has
risen 21% over the last 12 months.
Messrs. Fairbank and Perlin have been a close team, transforming
Capital One from a credit-card lender into a retail bank just
before the financial crisis hit through the purchase of two large
regional banks in New Orleans and New York.
Mr. Perlin has long insisted Capital One would have survived the
crisis even without the bank acquisitions, but funding credit-card
loans and the reluctance of consumers to borrow on their cards
during the recession would have challenged Capital One
severely.
Two weeks ago, Capital One reported a fourth-quarter profit of
$843 million, or $1.41 a share, up from $407 million, or 88 cents a
share, a year earlier. Total net revenue climbed 39% to $5.62
billion.
Last year it acquired the U.S. online-banking arm of ING Groep
NV (ING, INGA.AE) and the U.S. credit-card business of HSBC
Holdings PLC (HBC, 0005.HK, HSBA.LN), a move that has made it one
of the largest issuers of private-label credit cards that are
marketed on behalf of retailers and other partners.
"Gary is leaving our financial house in good order," Mr.
Fairbank said in a memorandum to staff. He wrote Mr. Perlin "has
improved our operations across accounting, treasury, and finance"
and "brought even more discipline and rigor to how we manage our
balance sheet and financial performance."
Throughout the transition to a bank, Mr. Crawford has advised
Capital One, which made him a logical choice for CFO, Capital One
said.
Mr. Crawford "knows our company, the industry and our management
team well. And he has significant financial services and CFO
experience," Mr. Fairbank said in a press release announcing the
appointment Friday.
Mr. Crawford founded the investment-banking and advisory firm
Centerview Partners Holdings LLC after leaving Morgan Stanley in
2005 following a short and turbulent tenure in the Wall Street
firm's uppermost ranks.
Mr. Crawford resigned soon after Mr. Purcell was ousted and John
Mack took over the leadership of Morgan Stanley. Mr. Crawford
received a controversial $32 million pay package when he left.
Morgan Stanley declined to comment on Mr. Crawford's appointment
at Capital One Friday.
Capital One said in a filing with the Securities and Exchange
Commission late Friday Mr. Crawford would receive a signing bonus
of $9.8 million in restricted stock, which will vest over five
years.
He will receive a salary of $2.6 million and incentive
compensation valued at $4.9 million for 2013, some of which will
vest over three years, the filing said.
Mr. Perlin had said he wanted to retire when reaching the age of
62. He was "instrumental as we successfully weathered an
unprecedented financial crisis and emerged in an even stronger
position to grow our company and create shareholder value," Mr.
Fairbank said.
Mr. Perlin joined Capital One in 2003 from the World Bank, where
he rose to CFO. Until 1993, he was an executive with mortgage
company Fannie Mae (FNMA). Capital One steered clear of the
mortgage business, in part because Messrs. Perlin and Fairbank
thought mortgage interest rates didn't reflect the inherent risk in
the mortgage business, an assessment that proved correct when the
housing market imploded.
Mr. Perlin is "a solid CFO," said KBW analyst Sanjay Sakhrani.
"It's definitely a loss." But "a lot of the heavy lifting that
needed to be done is done."
Now Capital One needs to demonstrate its strategy of recent
acquisitions will be successful, and returning capital to
shareholders is going to be a big part of investors' expectations
going forward, Mr. Sakhrani said.
Write to Matthias Rieker at matthias.rieker@dowjones.com
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