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EXHIBIT 10.8
BANCO POPULAR
ANNUAL INCENTIVE PLAN
PRESIDENT & CEO
In line with the Strategic Plan, the Board of Directors of Banco Popular
approved an Annual Incentive Plan for the President and CEO, as follows:
Annual Incentive Plan
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Incentive Bonus will be granted based on the financial results of Popular, Inc.
according to the following table:
% of Salary
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Bonus Awarded
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- Net Income After Tax (Pro-rated)
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Budget 15%
105% of Budget 20%
Over 105% of Budget 25%
- ROE Incentive
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15.00% 10%
15.50% 15%
16.00% 20%
16.50% 25%
17.00%+ 30%
- In addition, the Incentive Bonus may be increased by 25% when
shareholder returns exceed 20% annually on a rolling three-year basis.
Total Shareholder Returns represents the compounded annual yield of the
stock, considering the market appreciation, dividends received and
dividend reinvested.
If no less than 95% of the Budget is achieved, the Human Resources and
Compensation Committees shall consider the President and CEO's personal
efforts, outside factors, economic situation and unanticipated conditions and
may recommend awarding a percentage of the Incentive that shall not be less
than 5.00% nor more than 15.00% of salary.
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BANCO POPULAR
ANNUAL COMPENSATION PLAN
SENIOR MANAGEMENT COUNCIL
In line with the Strategic Plan, the Board of Directors of Banco Popular has to
approve a Senior Management Council Salary and Annual Incentive Program as
follows:
PARTICIPANTS:
Senior Executive Vice President and Executive Vice President reports directly
to the President subject to annual confirmation by the Board of Directors. The
participants are:
SALARY INCREASES:
Salary increases will be based on two components: Team Performance and
Individual Review. The parameter for Team Performance is based on the financial
results of Popular, Inc.
NET INCOME AFTER TAX TEAM INCREASE INDIVIDUAL REVIEW TOTAL POTENTIAL INCREASE
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Under Budget 0% 0-4% 0-4%
Budget 4% 0-8% 4-12%
105% of budget 5% 0-10% 5-15%
110% of budget 6% 0-12% 6-18%
Over 100% of budget 7% 0-14% 7-21%
ANNUAL INCENTIVE PLAN:
Incentive Bonus will be granted based on the financial results of Popular, Inc.
according to the following table:
% OF SALARY
BONUS AWARDED
NET INCOME AFTER TAX (PRO-RATED)
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Budget 15%
105% of Budget 20%
Over 105% of Budget 25%
ROE INCENTIVE
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15.00% 10%
15.50% 15%
16.00% 20%
16.50% 25%
17.00%+ 30%
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In addition, the Incentive Bonus may be increased by 25% when shareholder
returns exceed 20% annually on a rolling three-year basis. Total
Shareholder Returns represents the compounded annual yield of the stock,
considering the market appreciation, dividends received and dividend
reinvested.
If no less than 95% of the Budget is achieved, the Human Resources and
compensation Committees shall meet with the Corporation's President and CEO to
consider the SMC's personal efforts, outside factors, economic situation and
unanticipated conditions and may recommend awarding a percentage of the
Incentive that shall not be less than 5.00% nor more than 15.00% of salary.
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Banco Popular de Puerto Rico
(The "Bank")
Administrative Committee
MANAGEMENT INCENTIVE
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The incentive bonus will be granted based on the achievement of
individuals and financial goals, established in the following components:
I. FINANCIAL GOALS
BASED ON NET INCOME BUDGETED FOR THE BANK
% OF ANNUAL SALARY
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100% of Budget 5.0%
105% of Budget 7.5%
over 105% 10.0%
RETURN ON EQUITY OF POPULAR, INC.
15.00% 1.0%
15.50% 2.0%
16.00% 3.0%
16.50% 4.0%
17.00% 5.0%
RETURN OF POPULAR, INC.'S SHAREHOLDERS
The incentive achieved with the first two components may be increased by
25% when shareholders returns exceed 20% annually on a rolling three-year basis.
Total Shareholders Returns represents the compounded annual yield of the stock,
considering the market appreciation, dividends received and dividend reinvested.
MAXIMUM OF THE INCENTIVE BY FINANCIAL GOALS
The incentive achieved with the first three components should not exceed
15% of the basic salary.
II. INDIVIDUALS GOALS
The incentive for the achievement of individuals goals will be from 0 up
to 15% of the annual basic salary. Nevertheless, to participate in this annual
incentive, the Bank should achieve the budgeted financial goals and the
participant should achieve 75% of the individuals goals.
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Banco Popular de Puerto Rico
(The "Bank")
Human Resources Division
Managers of Departments and Branches
Management Incentive
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The incentive bonus will be granted based on individuals and
financials goals, established in the following components:
I. FINANCIAL GOALS
BASED ON NET INCOME BUDGETED FOR THE BANK
% OF ANNUAL BASIC SALARY
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100% of Budget 2%
105% of Budget 4%
over 105% 6%
II. INDIVIDUALS GOALS
The incentive for the achievement of the individuals goals will be
from 0 up to 15% of the annual basic salary. Nevertheless, to participate in
this annual incentive, the Bank should achieve its budgeted financial goals and
the participant should achieve not less than 75% of the individuals goals.
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