According to his webpage on the First Republic Bank website, James H. Herbert is the bank’s Founder and Executive Chairman:
Mr. Herbert founded First Republic Bank in 1985 and served as CEO for 37 years. From 2007, he also served as Chairman. He was appointed Executive Chairman in 2022.
Take the Money
In my last post I wrote that to loot a bank, lazy bank insiders “could just lend to a corporation they control, have it pay them a huge salary, then declare bankruptcy when the loan proceeds are all gone.”
I neglected to mention an even lazier strategy: hire your relatives and pay them a huge salary. I thought about writing this, but I didn’t because I find that nobody believes that anyone would do this. But now this:
“A consulting company owned by Mr. Herbert’s brother-in-law earned $2.3 million for advisory work related to its “investment portfolio, risk management, interest rate and economic outlook and other financial matters” in 2021, it said in an annual proxy filing filed last spring. First Republic also paid Mr. Herbert’s son $3.5 million to oversee a lending unit at the bank, the disclosures said. The two family members were paid similar amounts in 2020.”
Fortuitous Stock Sales
You will not be surprised that Mr. Herbert was also able to sell lots of shares at prices that are about 10X today’s price of $12.36. According to Yahoo Finance, here are Herbert’s stock sales from the last two years:
Date Share price Quantity Value Feb 22, 2023 $124 15,000 $1,860,000 Jan 17, 2023 $132 20,000 $2,640,000 Oct 26, 2022 $116 20,000 $2,320,600 Mar 16, 2022 $167 35,000 $5,845,000 Aug 02, 2021 $197 15,000 $2,955,000 Apr 30, 2021 $185 25,000 $4,625,000
Loans to insiders
Still waiting to hear about these.