MGIC Investment Corp. former Chief Executive Officer Curt Culver, who presided over an 85% stock-price decline during his tenure, received compensation valued at about $8 million for his last full year in the top job.
Culver, 62, received a salary of $966,000 for 2014, stock awards of $2.42 million and incentive pay of $2.9 million, the Milwaukee-based mortgage insurer said March 24 in a filing. A gain in the value of his pension added another $1.73 million. Culver stays on the board as non-executive chairman with a $250,000 yearly retainer in addition to the compensation given to non-employee directors, the company said in July.
Culver took over as CEO on Jan. 1, 2000, and
The crash of the real estate market pulverized mortgage insurers as U.S. homeowners failed to keep up with payments. To replenish cash used to pay defaulted loans, Culver raised capital with three stock offerings.
Culver needed "to fix the balance sheet to absorb the losses," William Ryan, an analyst at Portales Partners, said in a March 13 interview, crediting Culver's decision to dilute shares for the company's survival. "It's very rare for you to see financial services come back from the brink of death."
Radian Group Inc., a competitor, also used stock offerings to accumulate cash. The Philadelphia-based company needed to raise less capital relative to MGIC because its financial guarantor operations provided a cushion, Ryan said.
MGIC closed at $9.13 in New York trading on Feb. 27, 2015, the final trading day while Culver was CEO, compared with more than $60 on the day before he took on the role. Radian shares dropped 34 percent to $15.81 over the same period.
Mortgage insurers cover losses when homeowners default and foreclosures fail to recoup costs. The policies are typically required when borrowers pay less than 20% of the cost of a home up-front. The financial crisis forced almost half of the companies in the industry to exit the business.
