(Bloomberg News) Genworth Financial Inc. cut Chairman and Chief Executive Officer Michael Fraizer's annual bonus to a third of his target as the life insurer and mortgage guarantor failed to meet its goals.
Fraizer was awarded $750,000 in annual incentive compensation for 2011, or 33 percent of his $2.25 million target, according to a proxy statement today. The CEO hasn't qualified for his full bonus since 2006 and got $1 million in 2010, filings show.
The worst U.S. housing crash in seven decades drained capital at mortgage insurers, which pay lenders when homeowners default and foreclosures fail to recoup costs. A $507 million net operating loss at Genworth's U.S. home-loan guaranty business helped spur a lower-than-forecast return on equity last year, which contributed to the board's decision on executive pay. The insurer's stock plunged 50 percent in 2011.
"We recognize that it was a difficult year for shareholders and are humbled by that," Fraizer, 53, said in a letter dated March 2012 in the Richmond, Virginia-based company's annual report.
Genworth said in a presentation in February that its mortgage-guaranty business may rebound next year on the strength of policies sold after 2008. The same month, the company said it hired Ray Romano, previously of Freddie Mac, as chief risk officer for U.S. mortgage insurance and promoted Dean Mitchell to chief financial officer of the unit.
The insurer fell 2 percent to $8.01 at 1:24 p.m. in New York, trimming its gain this year to 22 percent. That compares with the 20 percent advance of the 81-company Standard & Poor's Financials Index since Dec. 31.
Fraizer was paid $1.12 million in salary, the same as in 2010, in addition to his annual bonus. His total compensation, including option awards, totaled $4.29 million, a 38 percent decrease from a year earlier, according to the proxy statement.
Al Orendorff, a spokesman for the insurer, declined to comment.