EX-97.1 12 d52551dex971.htm EX-97.1 EX-97.1
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EXHIBIT 97.1
COMPENSATION RECOUPMENT POLICY
Responsible Unit: Our People Corporate Services
Data Classification Level: 4 - Public
Adoption Date: June 23, 2023
 
 
 
 
 
 
 
 
 
 
 
2
COMPENSATION RECOUPMENT POLICY
I.
POLICY PURPOSE
Popular,
 
Inc. (the “Corporation
 
”) has adopted
 
this Compensation
 
Recoupment Policy
 
(this “Policy”)
 
to provide
for the recovery
 
or “clawback” of
 
excess Incentive-Based Compensation
 
earned by current or
 
former Executive
Officers of the Corporation in the event of a required Restatement and to provide for
 
the recovery or “clawback”
of
 
Covered
 
Awards
 
earned
 
by
 
current
 
or
 
former
 
Covered
 
Employees
 
of
 
the
 
Corporation
 
in
 
the
 
event
 
of
Misconduct (each, as defined under Section II of this Policy).
This Policy is
 
intended to comply
 
with the requirements
 
of Rule 10D-1
 
of the Securities
 
Exchange Act of
 
1934
and
 
the Nasdaq
 
Stock Market
 
(“Nasdaq”)
 
Listing Rule
 
5608
 
(the “Listing
 
Standard”).
 
To
 
the extent
 
that any
provision in this Policy is ambiguous as to
 
its compliance with the Listing Standard or to the
 
extent any provision
in
 
this
 
Policy
 
must
 
be
 
modified
 
to
 
comply
 
with
 
the
 
Listing
 
Standard,
 
such
 
provision
 
will
 
be
 
read,
 
or
 
will
 
be
modified, as
 
the case
 
may be,
 
in such
 
a manner
 
so that
 
all applicable
 
provisions under
 
this Policy
 
comply with
the Listing Standard.
II.
DEFINITIONS
Unless the context otherwise requires, the following definitions apply for
 
purposes of this Policy:
“Board” means the Board of Directors of the Corporation.
 
“Committee”
 
means the Talent and
 
Compensation Committee of the Board.
“Covered Award
 
”
 
means any annual or long-term
 
cash, equity or equity-based incentive
 
or bonus compensation
paid, provided or awarded to any Covered Employee.
“Covered Employee” means
 
an Executive Officer
 
and any other employee
 
who is designated
 
by the Committee
as a Covered Employee for purposes of this Policy,
 
as determined from time to time.
 
“Executive Officer”
 
means the
 
Corporation’s
 
president, principal
 
financial officer,
 
principal accounting
 
officer
(or if there is no such
 
principal accounting officer, the controller), any vice president of the Corporation in charge
of a principal business unit, division, or function (such
 
as sales, administration, or finance), any other officer who
performs a
 
policy-making
 
function, or
 
any other
 
person who
 
performs similar
 
policy-making
 
functions for
 
the
Corporation.
 
Executive
 
officers
 
of
 
the
 
Corporation’s
 
subsidiaries
 
are
 
deemed
 
Executive
 
Officers
 
of
 
the
Corporation
 
if
 
they
 
perform
 
such
 
policy-making
 
functions
 
for
 
the
 
Corporation.
 
Policy-making
 
function
 
is not
intended
 
to include
 
policy-making
 
functions
 
that are
 
not significant.
 
Identification of
 
an Executive
 
Officer
 
for
purposes of this
 
Policy will include
 
at a minimum
 
executive officers
 
identified pursuant
 
to 17 CFR
 
229.401(b).
For purposes of
 
this Policy,
 
Executive Officers
 
are those persons
 
designated by the
 
Board as the
 
policy-making
officers of the Corporation for purposes of Section 16 of the Securities Exchange
 
Act of 1934 from time to time.
“Financial Reporting
 
Measures” means
 
any of
 
the following: (i)
 
measures that
 
are determined
 
and presented
 
in
accordance
 
with
 
the
 
accounting
 
principles
 
used
 
in
 
preparing
 
the
 
Corporation’s
 
financial
 
statements,
 
and
 
any
measures that are derived wholly or in part from such measures, (ii) stock price and (iii) TSR (as defined below).
 
A Financial Reporting
 
Measure need not be
 
presented within the
 
Corporation’s
 
financial statements or
 
included
in a filing with the SEC.
“Incentive-Based Compensation”
 
means any compensation
 
that is granted,
 
earned, or vested
 
based wholly or
 
in
part upon the
 
attainment of a
 
Financial Reporting Measure.
 
Examples of compensation that
 
is not Incentive-Based
Compensation under this Policy
 
include, but are not limited to: (i)
 
salaries (a salary increase earned
 
wholly or in
part based on
 
the attainment of a
 
Financial Reporting Measure
 
is subject to a
 
recovery); (ii) bonuses
 
paid solely
at
 
the
 
discretion
 
of
 
the
 
Committee
 
or
 
the
 
Board
 
that
 
are
 
not
 
paid
 
from
 
a
 
“bonus
 
pool”
 
that
 
is
 
determined
 
by
satisfying a Financial Reporting Measure performance goal; (iii) bonuses paid solely upon
 
satisfying one or more
 
 
 
3
subjective
 
standards
 
(e.g.,
 
demonstrated
 
leadership)
 
and/or completion
 
of a
 
specified
 
employment
 
period; (iv)
non-equity
 
incentive
 
plan
 
awards
 
earned
 
solely
 
upon
 
satisfying
 
one
 
or
 
more
 
strategic
 
measures
 
(e.g.,
consummating
 
a
 
merger
 
or
 
divestiture),
 
or
 
operational
 
measures
 
(e.g.,
 
opening
 
a
 
specified
 
number
 
of
 
offices,
completion of
 
a project,
 
increase in
 
market share);
 
and (v)
 
equity awards
 
for which
 
the grant
 
is not
 
contingent
upon
 
achieving
 
any
 
Financial
 
Reporting
 
Measure
 
performance
 
goal
 
and
 
vesting
 
is
 
contingent
 
solely
 
upon
completion of a specified employment period and/or attaining one or
 
more nonfinancial reporting measures.
“Misconduct” means (A)
 
the Covered Person’s
 
willful violation of federal,
 
state or local law,
 
rule or regulation,
in
 
either
 
case,
 
that
 
causes material
 
financial
 
or reputational
 
harm
 
to the
 
Corporation
 
or
 
any
 
of its
 
affiliates
 
or
subsidiaries; (B) the material breach by the Covered Person of any written policy
 
of the Corporation or covenant
between the Corporation
 
and the Covered Person;
 
(C) the Covered Person’s
 
willful or reckless disclosure
 
of the
Corporation’s
 
confidential
 
information
 
or trade
 
secrets;
 
or
 
(D)
 
the
 
Covered
 
Person’s
 
commission
 
of
 
an
 
act
 
of
fraud, dishonesty
 
or recklessness in
 
the performance
 
of the Covered
 
Person’s
 
duties, which
 
is not in
 
good faith
and which
 
subjects the
 
Corporation or
 
its affiliates
 
or subsidiaries
 
to excessive
 
risk, financial loss
 
or materially
disrupts, damages, impairs or interferes with the business of the Corporation
 
and its affiliates or subsidiaries.
“SEC” means the Securities and Exchange Commission.
“TSR” means total shareholder return.
III.
RECOUPMENT IN THE EVENT OF RESTATEMENT
A.
POLICY WITH RESPECT TO RECOUPMENT DUE TO
 
RESTATEMENT
The
 
Corporation
 
shall
 
recover
 
reasonably
 
promptly
 
the
 
amount
 
of
 
erroneously
 
awarded
 
Incentive-Based
Compensation in
 
the event that
 
the Corporation
 
is required to
 
prepare an accounting
 
restatement due to
 
the
material
 
noncompliance
 
of
 
the
 
Corporation
 
with
 
any
 
financial
 
reporting
 
requirement
 
under
 
the
 
securities
laws,
 
including
 
any
 
required
 
accounting
 
restatement
 
to
 
correct
 
an
 
error
 
in
 
previously
 
issued
 
financial
statements that
 
is material
 
to the
 
previously
 
issued financial
 
statements, or
 
that would
 
result in
 
a material
misstatement
 
if
 
the
 
error
 
were
 
corrected
 
in
 
the
 
current
 
period
 
or
 
left
 
uncorrected
 
in
 
the
 
current
 
period
 
(a
“Restatement”). Examples
 
of changes
 
to the
 
Corporation’s
 
financial statements
 
that do
 
not represent
 
error
corrections and will not trigger the application of
 
this Policy include, but are not limited to: (i) retrospective
application of a change in accounting principle; (ii) retrospective revision to reportable segment information
due to a change in the structure
 
of an issuer’s internal organization;
 
(iii) retrospective reclassification due to
a
 
discontinued
 
operation;
 
(iv)
 
retrospective
 
application
 
of
 
a
 
change
 
in
 
reporting
 
entity,
 
such
 
as
 
from
 
a
reorganization
 
of
 
entities
 
under
 
common
 
control;
 
(v)
 
retrospective
 
adjustment
 
to
 
provisional
 
amounts
 
in
connection with
 
a prior business
 
combination; and
 
(vi) retrospective
 
revision for
 
stock splits, reverse
 
stock
splits, stock dividends or other changes in capital structure.
The Corporation shall recover
 
erroneously awarded Incentive-Based
 
Compensation in compliance
 
with this
Policy, except to
 
the extent provided under Section III.E. of this Policy.
B.
SCOPE OF APPLICATION
 
1.
Persons Covered
 
and Recovery
 
Period.
 
Recoupment under
 
this Section
 
III applies
 
to all
 
Incentive-Based
Compensation received by a person:
 
●
after beginning service as an Executive Officer,
●
who served as an Executive
 
Officer at any time during the
 
performance period for that Incentive-Based
Compensation,
 
 
4
●
while the Corporation has a class of securities listed on Nasdaq, and
●
in the case of a Restatement, during the
 
three completed fiscal years immediately preceding the date that
the Corporation is required to prepare a Restatement (the “Recovery
 
Period”).
Notwithstanding
 
this
 
look-back
 
requirement,
 
the
 
Corporation
 
is
 
only
 
required
 
to
 
apply
 
this
 
Policy
 
to
Incentive-Based Compensation received on or after October 2, 2023.
For purposes of this Policy, Incentive-Based Compensation shall be deemed
 
“received” in the Corporation’s
fiscal period
 
during which
 
the Financial
 
Reporting Measure
 
(as defined
 
herein) specified
 
in the
 
Incentive-
Based Compensation
 
award is attained,
 
even if
 
the payment or
 
grant of
 
the Incentive-Based
 
Compensation
occurs after the end of that period.
2.
Transition Period.
 
In addition
 
to the
 
Recovery Period,
 
in the case
 
of a Restatement,
 
this Policy
 
applies to
any
 
transition
 
period
 
(that
 
results
 
from
 
a
 
change
 
in
 
the
 
Corporation’s
 
fiscal
 
year)
 
within
 
or
 
immediately
following
 
the Recovery
 
Period (a
 
“Transition
 
Period”), provided
 
that a
 
Transition
 
Period between
 
the last
day of the
 
Corporation’s previous
 
fiscal year end
 
and the first day
 
of the Corporation’s
 
new fiscal year that
comprises a period of nine to 12 months will be deemed a completed fiscal year.
3.
Determining Recovery
 
Period.
 
For purposes
 
of determining
 
the relevant
 
Recovery Period
 
in the
 
case of
 
a
Restatement, the date that the Corporation is required to prepare the Restatement
 
is the earlier to occur of:
●
the date the Board, a
 
committee of the Board, or the officer
 
or officers of the
 
Corporation authorized to
take such
 
action if
 
Board action
 
is not
 
required, concludes,
 
or reasonably
 
should have
 
concluded, that
the Corporation is required to prepare a Restatement, and
●
the
 
date
 
a
 
court,
 
regulator,
 
or
 
other
 
legally
 
authorized
 
body
 
directs
 
the
 
Corporation
 
to
 
prepare
 
a
Restatement.
For
 
clarity,
 
the
 
Corporation’s
 
obligation
 
to
 
recover
 
erroneously
 
awarded
 
Incentive-Based
 
Compensation
under this Policy is not dependent on if or when a Restatement is filed.
C.
AMOUNT SUBJECT TO RECOVERY
1.
Recoverable Amount - Restatement.
 
The amount of Incentive-Based Compensation subject
 
to recovery
under this Policy in the case of a Restatement is the amount
 
of Incentive-Based Compensation received
that exceeds the amount of Incentive-Based Compensation that otherwise
 
would have been received had
it been determined based on the restated amounts, computed without regard
 
to any taxes paid.
 
2.
Covered Compensation
 
Based on
 
Stock Price
 
or TSR.
 
For Incentive-Based
 
Compensation
 
based on
stock
 
price
 
or
 
TSR, where
 
the
 
amount
 
of
 
erroneously
 
awarded
 
Incentive-Based
 
Compensation
 
is not
subject to
 
mathematical
 
recalculation
 
directly from
 
the information
 
in a
 
Restatement, the
 
recoverable
amount
 
shall
 
be
 
determined
 
by
 
the
 
Committee
 
based
 
on
 
a
 
reasonable
 
estimate
 
of
 
the
 
effect
 
of
 
the
Restatement on the stock price or TSR upon which the Incentive-Based Compensation was received.
 
In
such
 
event,
 
the
 
Corporation
 
shall
 
maintain
 
documentation
 
of
 
the
 
determination
 
of
 
that
 
reasonable
estimate and provide such documentation to Nasdaq.
D.
METHOD OF RECOVERY
Without
 
limiting
 
anything
 
in
 
this
 
Section
 
III,
 
the
 
Committee
 
will
 
have
 
discretion
 
in
 
determining
 
how
 
to
accomplish recovery
 
of erroneously
 
awarded Incentive-Based
 
Compensation under
 
this Policy in
 
the event of
 
a
Restatement, recognizing that different means of recovery
 
may be appropriate in different circumstances.
 
5
E.
EXCEPTIONS
The Corporation shall recover erroneously awarded Incentive-Based Compensation
 
in compliance with this
Policy except to the extent that the conditions set out below are met and
 
the Committee has made a
determination that recovery would be impracticable:
 
1.
Direct Expense Exceeds Recoverable Amount.
 
The direct expense paid to a third party to assist in
enforcing this Policy would exceed the amount to be recovered; provided, however,
 
that before concluding
it would be impracticable to recover any amount of erroneously awarded Incentive
 
-Based Compensation
based on expense of enforcement, the Corporation shall make a reasonable
 
attempt to recover such
erroneously awarded Incentive-Based Compensation, document such
 
reasonable attempt(s) to recover, and
provide that documentation to Nasdaq.
2.
Recovery from Certain Tax
 
-Qualified Retirement Plans.
 
Recovery would likely cause an otherwise tax-
qualified retirement plan, under which benefits are broadly available to employees
 
of the Corporation, to
fail to meet the requirements of 26 U.S.C. 401(a)(13) or 26 U.S.C. 411(a)
 
and regulations thereunder.
F.
PROHIBITION AGAINST INDEMNIFICATION
Notwithstanding the
 
terms of any
 
indemnification arrangement
 
or insurance policy
 
with any individual
 
covered
by this Policy, the Corporation shall not indemnify any Executive Officer or former
 
Executive Officer against the
loss
 
of
 
erroneously
 
awarded
 
Incentive-Based
 
Compensation.
 
In
 
addition,
 
the
 
Corporation
 
may
 
not
 
pay
 
or
reimburse an
 
Executive Officer
 
for premiums
 
for a
 
third-party insurance
 
policy to
 
fund any
 
potential recovery
obligations under this Policy.
G.
DISCLOSURE
The Corporation shall file all disclosures with respect to recoveries of Incentive
 
-Based Compensation under this
Policy in accordance with the requirements of the U.S. Federal securities laws, including
 
the disclosure required
by the applicable SEC filings.
IV.
RECOUPMENT IN EVENT OF MISCONDUCT
A.
POLICY WITH RESPECT TO RECOUPMENT DUE TO
 
MISCONDUCT
If
 
the
 
Committee
 
determines,
 
in
 
its
 
sole
 
discretion,
 
that
 
an
 
act
 
or
 
omission
 
by
 
a
 
Covered
 
Employee
 
that
constitutes
 
Misconduct
 
has
 
occurred,
 
the
 
Committee
 
may
 
determine
 
that
 
the
 
Corporation
 
recover
 
all
 
or
 
any
portion of (A) any
 
outstanding and unpaid or
 
unsettled Covered Award (whether or not vested) that
 
was awarded
to a
 
Covered Employee
 
and (B)
 
any Covered
 
Award
 
that was
 
paid to
 
or received
 
by a
 
Covered Employee,
 
in
each case, during the
 
12 month period
 
preceding the date
 
of the Misconduct,
 
or the date
 
the Corporation becomes
aware of such Misconduct, as determined by the Committee in its sole discretion.
Notwithstanding anything herein to the
 
contrary, the Committee retains the sole
 
discretion to determine whether,
and to
 
what extent,
 
to enforce
 
such recoupment,
 
repayment or
 
forfeiture upon
 
consideration of
 
each situation
based on
 
its individual
 
facts and
 
circumstances and
 
may make
 
determinations that
 
are not
 
uniform among
 
the
Covered Employees.
 
B.
SCOPE OF APLICATION
Recoupment under this Section IV applies to all Covered Awards
 
received by a Covered Employee:
 
●
after beginning service as a Covered Employee; and
6
●
who served as a Covered Employee at any time during the performance period for that
 
Covered
Award.
V.
ADMINISTRATION
The Committee shall oversee compliance with this Policy and
 
perform the obligations assigned thereto under this
Policy. Any determinations of the Committee will be final, binding
 
and conclusive and need not be uniform with
respect to each individual covered by this Policy.
 
Our
 
People
 
Corporate
 
Services
 
Division
 
is
 
responsible
 
for
 
carrying
 
out
 
this
 
Policy
 
and
 
administering
 
any
recoupments
 
thereunder,
 
subject to
 
Committee oversight.
 
Our People
 
Corporate
 
Services Division
 
shall notify
the Chief Legal Officer and the Comptroller of any recoupments
 
made under this Policy.
 
The Comptroller Division shall promptly notify the Our People Corporate Services Division and the Chief Legal
Officer of any Restatement.
 
Subject to Section IX, the Committee
 
may amend this Policy from
 
time to time and may terminate
 
this Policy at
any time,
 
in each case
 
in its sole
 
discretion and
 
in accordance
 
with the
 
Nasdaq Listing
 
Standard and
 
applicable
law.
VI.
EFFECTIVENESS; OTHER RECOUPMENT RIGHTS
This Policy shall be effective as of October 2, 2023.
 
Any right of recoupment under this Policy is in addition to,
and not
 
in lieu
 
of, any
 
other remedies
 
or rights
 
of recoupment
 
that may
 
be available
 
to the
 
Corporation and
 
its
subsidiaries and affiliates under applicable law or pursuant to the terms of any similar policy or similar provision
in any employment agreement, equity award agreement or similar agreement.
VII.
NON-COMPLIANCE NOTIFICATIONS
Any violation
 
of this Policy
 
must be reported
 
immediately to the
 
Corporation’s
 
Chief Legal Officer.
 
Violations
may
 
also
 
be
 
reported
 
to
 
the
 
Corporation’s
 
Corporate
 
Ethics
 
Officer
 
or
 
anonymously
 
through
 
EthicsPoint
 
at
www.popular.com/ethicspoint
 
-en
 
(English),
 
www.popular.com/ethicspoint
 
(Spanish),
 
or
 
by
 
calling
 
-866-737-
6813 from Puerto
 
Rico, the United
 
States or the
 
U.S. Virgin
 
Islands; 1-833-416-6777
 
from Puerto
 
Rico; 1-833-
439-1392
 
from
 
the
 
British
 
Virgin
 
Islands;
 
01-800-519-0915
 
from
 
Colombia
 
and
 
0-800-032-0441
 
from
 
Costa
Rica.
VIII.
SANCTIONS
 
Failure by
 
the Corporation
 
to comply with
 
the disclosure
 
and recovery
 
provisions of
 
this Policy
 
with respect to
Incentive-Based Compensation
 
may subject
 
the Corporation
 
to delisting
 
from Nasdaq
 
and SEC penalties.
 
Non-
compliance with this Policy by
 
any officer or employee may subject
 
the officer or employee to
 
disciplinary action
by the Corporation, up to and including termination for
 
cause. Non-compliance may also constitute violations of
law subject to investigation, and in some cases may carry civil or criminal prosecution
 
and sanctions.
IX.
REVIEW OF POLICY
The Our People Corporate Services division, in consultation with the Chief Legal Officer of the Corporation will
review this Policy on an annual basis and recommend such revisions or amendments, if any, to the Committee as
deemed necessary or
 
appropriate. The Committee
 
shall review and
 
approve any revisions
 
to this
 
Policy and submit
it to the Board for ratification, annually.