Institutional Shareholder Services Inc. recommended that shareholdersvote against approving the company's executive compensation in its nonbinding say-on-payvote.
First Republic's board called the ISS position a "surpriseand disappointment" and noted that the proxy advisory firm had acknowledgedpay and performance were in alignment at the San Francisco-based bank. Its objectionwas based on the opinion that the compensation committee did not sufficiently respondto shareholders' concerns. ISS also remarked on the high annual cap for CEO incentivecompensation.
In rebuttal, First Republic's board pointed out that meetingswith shareholders have yet to yield recommendations for material changes to theprogram and that pre-tax income would have to be 40% higher than it was in 2015for the CEO to be eligible for the maximum bonus payout.
First Republic's proxy statement added that another advisoryfirm, Glass Lewis & Co. Inc., was in favor of First Republic's compensationresolution.
The annual shareholder meeting is May 10.