NCB Financial Group CEO Patrick Hylton has sought to clear the air surrounding the reason behind his pending separation from the financial conglomerate, saying he “understands” these things happen in business, while addressing the “noise” surrounding his compensation that has become public discussion in recent weeks.

Hylton and his deputy Dennis Cohen had shared a statement early Tuesday with the Jamaica Observer saying they “have done nothing wrong” after news emerged on Monday that they are on three weeks vacation leave.

Later Tuesday, Hylton provided further details in an interview with the Business Observer. Cohen had agreed initially to give an interview about the matters as well, but backed out after, saying he wished to add nothing to the statement that had been released.

However, Hylton, who said he sent out the statement because the media reports and public discussions were causing “undue concern and distress”, addressed the issues head on.

“I have been getting a lot of feedback from the information that is out there in the media in terms of how people are interpreting it,” Hylton told the Business Observer.

“For example, people are interpreting the fact that we are on leave as meaning that we have done something wrong, because a lot of people associate your being on leave with the fact that there needs to be some investigation that you are not a part of, and I think it is important to clarify that this is not the case,” he said.

“The board requested that we go on leave, and we said ‘OK, fine. No problem.'”

He added that, while he is on leave, he is now negotiating a separation package from the company, but said he will not get into the details, because he does not intend to negotiate in the public.

He pointed out that a big part of the disagreement now with the company stems from the compensation for himself and Cohen.

“Over the past few weeks there have been articles, there have been statements that I have seen, talking about the size of our compensation, and I am just making the point that there is a context to it,” he said.

“Back in 2021 there was a surrender and return to the company of a significant number of shares, something which was made public at the time because the company publicised it,” he continued.

That is in relation to shares valued at $13.8 billion which both Hylton and Cohen were asked to surrender in July 2021 “arising from an approved change to the compensation arrangements” for both, according to a statement to the Jamaica Stock Exchange at the time. The shares were gained as part of compensation for both men tied to the performance of NCB Financial Group.

“I am making the point that that would have influenced the arrangements for our compensation going forward, in as much as we would have needed to be compensated for the surrender as well as to be compensated for getting back the value that we have given in relation to that particular transaction,” Hylton said.

In the last financial year, Hylton’s and Cohen’s compensation package was $3.6 billion.

Hylton said earlier this year, he and Cohen were asked to consider amendments to their compensation and both made certain proposals in that regard.

“We were asked to take a look again, which we did, and we recently presented another set of proposals to result in a deferral of a significant portion of our compensation. The board requested that we look at further adjustments which would hit a particular target. We did so, and I verbally shared these proposals with Professor Alvin Wint when he was acting as chairman. We were scheduled to discuss them with him on Monday morning,” Hylton said in the statement.

However, those discussions did not take place, with both men sent on leave or now being in the process of being separated from the company.

But Hylton indicates he has no hard feeling over the developments in the last few days.

“We understand the nature of the business world and how it operates. As somebody said to me today, who called me, a very prominent businessperson, who said to me that it is extremely unusual to have a CEO for almost 20 years in a publicly-traded company, so that in and of itself speaks for itself,” Hylton acknowledged.

Hylton spent 20 years as the head of the NCB Group, while Cohen spent just over 19 years. Both were acknowledged for their service by the bank in a statement in which it was confirmed that they are to be replaced.

“The fact is that sometimes we get to a point where different stakeholders may have different points of view on the direction in which a company should go, or how things should be managed or evolved, and that’s fine. And if there is a difference and you can’t come to a resolution around it, then separation is part of the resolution. We understand that. That’s part of the game. That’s part of the business that we are involved in,” Hylton told the Business Observer.

He then turned to the matter of the non-payment of dividends for the past two years, which NCB Financial Group Chairman Michael Lee-Chin said he is not happy about.

“More recently, the company has had some challenges in terms of not paying a dividend, given our posture that we want to reserve as much as possible, given the uncertainty in the environment,” he started.

While withholding dividends, NCB Financial Group transferred $8.1 billion from the monies it has on its books as retained earnings to the retained earnings reserves, pushing that total to more than $75 billion.

“It was a judgement call which we had to make,” Hylton said of the management’s decision not to propose a dividend over the last eight quarters. The company’s board will meet in early August to review its performance over the April to June quarter with the expectation that a dividend will be declared. The last time a dividend was declared was in April 2021 with that paid in May. Before that, NCB Financial Group’s dividend was a reliable source of income for its shareholders, except for the period April 2020 to April 2021 when the Bank of Jamaica mandated that all financial institutions suspend dividend payments in the wake of the impact the COVID-19 pandemic was having on the global economy.

Now, as he gets ready to depart, Hylton reflected on the journey, saying it has been a tremendous experience which he and Cohen enjoyed.

“We have demonstrated over many years a true owners’ mentality in terms of how we have managed the business. We have treated the business as if it was our own — early mornings, late nights, vacation, no vacation — it was always about the business,” he said.

“The business is strong, the business is in good hands. I feel a tremendous sense of accomplishment. When we went into NCB, this was an institution that had just failed, had just been rescued, and was in the process of just being rebuilt. It was an institution in which many did not have the confidence, many did not think it had the wherewithal to become a true icon. But this institution is now not just a Jamaican icon, it is a regional icon. It has accomplished tremendous things over this period of time. Not only in terms of the bottom line performance, which has really been outstanding, with up to last year earning nearly $40 billion after taxes. But also in terms of the growth of the business across the region, moving from two or three countries to now being represented in 22 countries across the region, to have representation in Europe. I have a tremendous sense of accomplishment,” Hylton said.

So, what’s next for Hylton?

He laughed before replying, “I haven’t decided that yet. I will take some time to reflect, to think about it. What’s immediate is just to get past this stage in terms of engaging in a dialogue to see what we can negotiate in terms of an exit and then, during that time I will give some thought as to what’s next.”