Capital One Financial Corp.
1680 Capital One Dr.
McLean, Va. 22102
www.capitalone.com Year founded: 1995 Industry: Financial services Revenue: $9.78 Billion Net Income/Loss: $1.14 Billion Earnings per share: $4.85 Dividend: $0.11 Stockholder equity: $6.05 Billion Auditor: Ernst & Young LLP Stock: COF Assets: $46.28 Billion Market capitalization: $17.85 Billion 52-week high: 77.67 4/12/2004 52-week low: 33.9 4/14/2003 Chairman, president and CEO: Richard D. Fairbank CFO: Gary L. Perlin Employees: 17760 Local employees: 950 Description: Capital One Financial, the nation's sixth-largest credit card issuer, has climbed to the top ranks of the nation's lenders by being a leader in micro-marketing—basing interest rate charges and other credit card terms on each cardholder's spending and payment habits. The company uses computers to collect consumer information and adjust credit profiles in a manner it says enables it to make changes more frequently and reliably than rivals. Developments: Capital One spent last year under a supervisory agreement, known as a memorandum of understanding, with federal banking regulators over concern that the company had not properly managed its risk during the preceding decade of rapid growth. The agreement was part of an overall crackdown by regulators on credit card lenders, especially on "subprime" loans, which are made to riskier borrowers. The company announced in January 2004 that the agreement had ended. The company also announced at about the same time that it would treat stock options as an expense against earnings, an about-face for a firm whose co-founders for years were paid in nothing but options and had argued against treating these contracts as a current cost. The company implemented the change in accounting policy for 2003, a decision that cut its earnings for the year by $6.3 million, bringing them to $1.1 billion. It said the impact on earnings would be even larger for 2004. The company in the first quarter of 2003 announced that Chief Financial Officer David M. Willey was stepping down amid a Securities and Exchange Commission investigation into a large stock sale he made. The SEC probe of Willey continues. The company said it is not a target of the probe. On May 1 company co-founder Nigel W. Morris stepped down as president and chief operating officer, assuming the position of vice chairman of the board as a first step toward leaving the company. That happens at the end of this month, when Morris is scheduled to resign from the board. The company said Morris was departing to spend more time with family and to "pursue other interests." Co-founder Richard D. Fairbank will continue as chairman and chief executive. Morris's departure comes amid the company's adoption of a new management style. Instead of being run largely by the co-founders, as it was for years, the company is now run by an executive committee, with power and oversight more widely dispersed. Last year Capital One refocused its credit card growth on less-risky customers, known as the prime market, an emphasis it plans to continue. It also plans to continue to diversify into other lending areas, including small businesses, automobile buyers and international borrowers. Non-card lending now accounts for more than a third of the loans the company makes. Executive Compensation
Chairman, President and CEO: Richard D. Fairbank
Total Cash: $0.00
Total Compensation: $12,809,460.00 President/U.S. Card: Catherine West
Total Cash: $886,763.00
Total Compensation: $4,010,558.00 Executive Vice President: John G. Finneran, Jr.
Total Cash: $947,805.00
Total Compensation: $3,846,676.00 Executive Vice President: Larry A. Klane
Total Cash: $865,327.00
Total Compensation: $3,594,515.00
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