Popular, the largest bank based in Puerto Rico, will get a new chief executive over the summer.
Javier Ferrer, the widely assumed heir to current CEO Ignacio Alvarez, will take over the top job on July 1, one day after Alvarez retires, the $73 billion-asset company announced Thursday.
Ferrer, a 63-year-old attorney, is currently Popular's president and chief operating officer. He was
In a press release announcing the transition, Ferrer said he is "fully committed" to strengthening the company with a focus on customer service, modernizing its technology capabilities and fostering "a culture of agility and performance to deliver increasing value" to shareholders.
Ferrer joined the
Over the last decade, Ferrer has held several jobs at Popular, including chief operating officer since 2022. Popular does not plan to name a new COO at this time, a company spokesperson told American Banker.
"Javier has assumed increasing responsibilities in key leadership positions, demonstrating that he has the experience and vision to lead Popular as the new CEO and ensure the organization's continued success," board Chair Richard Carrión said in the press release.
As president and CEO, Ferrer will receive an annual base salary of $1.05 million, effective July 1, the company disclosed Thursday in a regulatory filing. In connection with his promotion, he was awarded a one-time equity incentive award of $1.02 million, which will be granted in restricted stock in June, when the board's talent and compensation committee meets.
In 2023, Ferrer's annual base salary was $782,308. Pay details for 2024 are not yet available.
Reaction to the impending CEO change was somewhat muted, given wide expectations that Ferrer, who has been guiding much of Popular's day-to-day business for years, would someday succeed Alvarez and that he will likely maintain the company's current strategy.
Popular has been focused on what it calls a "business transformation," which aims to increase earnings, drive more efficiencies and improve a key profitability metric, its return on tangible common equity, which was 9.85% for full-year 2024, up slightly from 9.4% for full-year 2023.
Popular expects to achieve at least 12% return on tangible common equity by year-end, Chief Financial Officer Jorge García said last month during the company's fourth-quarter earnings call. In the longer term, it is aiming for 14% ROTCE on a sustainable basis, García said.
Analyst Frank Schiraldi of Piper Sandler said in a research note that he does "not expect this announcement to result in much of a shift to [Popular's] overall business model or strategy."
Although Ferrer "is the obvious candidate to replace" Alvarez, the incoming CEO may have some work ahead of him to become better known by institutional investors, Schiraldi said in his note.
"While he has been ramping up his participation with investors over the last six to 12 months (roadshows, conference call commentary), we would suggest that he is still not necessarily well known in the institutional investor community and expect he will be introduced further through a pick-up in face-to-face activity over the ensuing months," Schiraldi wrote.
The Puerto Rico-based company's board of directors has given an additional title to COO Javier Ferrer, naming him president as of May 9. His career path closely resembles that of his boss, CEO Ignacio Alvarez.
Alvarez, 66, has agreed to provide consulting services to Popular from July through December to facilitate the CEO transition and support of business initiatives, the company said in the filing. He will receive a monthly consulting fee of $47,000 during that time period.
The company does not have a mandatory retirement age for CEOs, the spokesperson said.
Alvarez, who is currently on Popular's board of directors, will step off the board upon retirement.
Alvarez received an equity incentive award of $3.4 million for his and Popular's performance in 2024, the company said in the filing. The award matches his target long-term equity incentive of 300% of his current base salary and was paid entirely in 33,776 shares of unrestricted stock, which will vest one year from his retirement date, the company said.
Popular is approaching its CEO transition similarly to Minneapolis-based U.S. Bancorp. Last spring, U.S. Bancorp
