FORMER NCB Financial Group executives Patrick Hylton and Dennis Cohen are now amongst the financial conglomerate’s largest shareholders in the aftermath of their $6-billion separation package from the company earlier this year. The data were revealed in a recent filing made by the NCB Financial Group on Jamaica Stock Exchange.
The filing showed the NCB Financial Group created 77 million new shares and issued them to both men as part of their separation package from the company following their resignation which took effect on November 13. Before their resignation, both men were on vacation leave for four months from mid-July.
The number of shares given to both men in the settlement is roughly equivalent to 80 per cent of the more than 95 million shares they were paid as compensation, but asked to surrender in July 2021 after a dispute which ultimately led to their separation from the company earlier this year. With a value of $62.68 per share, it means both men received shares valuing over $4.8 billion in the settlement. The rest of the settlement, approximately $1.025 billion was paid in cash. When the men surrendered the 95 million shares in 2021, they were valued at over $13 billion — the sum both men were sticking out for before relenting after a series of negotiations.
Hylton, who was the CEO for a combined 21 years — first for the National Commercial Bank Jamaica (NCBJ) from 2002 before taking the helm of the newly created holding company, NCB Financial Group, in 2018 — received 51,333,333 of the newly created shares, a figure corresponding to about two-thirds of the total. Cohen, on the other hand, received the rest amounting to 25,666,667.
Before the new shares were issued, Hylton held 9,505,655 shares in NCB Financial Group while Cohen held 2,267,344 shares. With the new shares, Hylton now has 60,838,988 ordinary shares in the NCB Financial Group, propelling him to the dizzying heights of being the fourth largest shareholder of one of the region’s biggest financial conglomerate. Only Michael Lee-Chin, the NCB Financial Group chairman who owns the shares through AIC (Barbados), MF&G Asset Management Limited — NCB Share Scheme, and Sagicor PIF Equity Fund, now hold more shares in the NCB Financial Group than Hylton. As for Cohen, his holding of NCB Financial Group shares is now 27,934,011, making him the eleventh largest shareholder in the company. Of note is that before both men were asked to surrender the over 95 million shares in 2021, Hylton at the time was the third largest shareholder in the NCB Financial Group with 70,931,097 shares and Cohen was the seventh largest owner with 35,975,204 shares.
And the shares were issued in time for both men to benefit from the recent $0.50 dividend declared by the company that was paid on December 18. Their combined holding of 88.8 million shares means both men received a total of $44.4 million in the payout before Christmas. Hylton’s holdings meant he received over $30.4 million in dividends, while Cohen’s account was credited with just under $14 million. The payouts are subject to a 15 per cent withholding tax. Altogether for the NCB Financial year, which ended on September 30, both men shared $2.70 billion in salaries and other benefits and received $2.17 billion in share benefits as a cash settlement based on the company financials.
Since their separation from the company, both Hylton and Cohen have moved on to different roles. Hylton is now the chairman of the board of directors at the University Hospital of the West Indies (UHWI). As for Cohen, he has taken up a pro bono role as chairman of The University of West Indies (UWI) project dubbed Operation Restructuring Transformation and Growth (RTG). Hylton was even unanimously re-elected as a director of Massy Holdings Limited at its December 18 annual general meeting.
That aside, the filing also showed Lee-Chin’s stake in the NCB Financial Group has dipped below 50 per cent for the first time. This as the issuance of the new shares to pay Hylton and Cohen led to a reduction in the percentage of shares held overall by each shareholder, a process called dilution.
Before the new shares were issued, the total number of outstanding shares in the NCB Financial Group was 2,466,762,828. That was, however, increased to 2,543,762,828 shares according to a filing on the Jamaica Stock Exchange, reflecting the 77 million new shares that were created. Under the assumption that AIC (Barbados) Limited — the entity through which Lee-Chin holds his stake in the NCB Financial Group — did not change its ownership of 1,261,730,942 shares, it would have seen its ownership decrease from 51.15 per cent to 49.60 per cent. When Lee-Chin purchased the National Commercial Bank in 2002, he held 75 per cent of the company through AIC (Barbados). With the recent payout, Lee-Chin himself received just under $631 million.