MBIA CEO gets second chance at big payout

MBIA CEO Joeseph "Jay" Brown wasn't able to cash in on a restricted stock grant that could have paid out at least $47 million last year. But the financial services firm is giving Brown another chance at a bigger potential payout, providing he sticks around and the share price climbs.

Brown, 65, served as CEO from 1999 to 2004, then returned as CEO in February 2008 in the wake of the financial crisis that exposed MBIA's bond insurance operation to risky mortgage-backed securities and massive losses.

At the time, Brown was granted more than 2.9 million restricted shares. But for Brown to cash in, MBIA had to trade at $16.20 or higher for at least 20 days. After the share price failed to crack that level, Brown forfeited the stock award last February. MBIA's board of directors then granted Brown 3 million additional shares, some with lower thresholds for cashing in.

According to MBIA's latest proxy filing, the fresh batch of restricted shares - which vest over five years - have to hit $25 for Brown to get the entire stock award. But MBIA's board set a lower bar for Brown to get something.

Shares currently trade at $14.39. If the stock trades at an average two-month price of $13, Brown would get 20% of the stock award, 40% if shares hit $16 and $17.50 for 50%. If shares hit $25, - worth about $72 million - all of the shares vest. MBIA shares peaked at about $122 in 1997 and sank to about $2.17 in 2009.

In considering the fresh restricted stock award, MBIA directors said the 2008 stock award "did not properly reflect Mr. Brown's contributions to the company over the period following his return."

Brown also received 2013 compensation valued at $5.6 million, including a $4 million incentive award. That's up nearly 700% from the $675,000 he received in 2012. His salary was doubled to $1 million, "adjusted to bring it in line with the market median base salary,'' MBIA said.

Brown and other senior executives received no bonuses or incentive awards in 2011 or 2012, based on concerns by New York state regulators.

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