Equifax Inc. disclosed that it was giving its chief executive $25 million in a “special” stock award Tuesday, just hours after a report detailed inaccurate credit reports the company sent to consumers.
The Wall Street Journal reported Tuesday that Equifax
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provided inaccurate credit scores for millions of consumers in a three-week period earlier this year, potentially affecting their ability to receive loans. In a statement, Equifax admitted “a coding issue within a legacy, on-premise server environment in the U.S.,” but said “that there was no shift in the vast majority of scores.”
A couple of hours after that story hit, Equifax issued a filing with the Securities and Exchange Commission showing that its chief executive, Mark Begor, had received a “special” one-time equity award currently worth $25 million that will vest at the end of 2025, when his current contract ends.
“Following review and consideration of various factors, including relevant industry data, market competition and Mr. Begor’s significant leadership contributions, the committee determined that Mr. Begor’s pay was meaningfully below peer group median,” the company said in its filing.
According to previous SEC filings, Begor received total compensation in 2021 of $16.07 million, 178 times the compensation of the median Equifax employee, which includes more than $250,000 in use of a private aircraft and more than $35,000 in spousal travel. Begor, who has a $1.5 million annual salary, received total compensation of $13.7 million in 2020 and $14.28 million in 2019, for a three-year total of more than $44 million.
Begor, a longtime General Electric Co.
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executive, was brought in to run Equifax after the credit-reporting company suffered a massive data breach that exposed the Social Security numbers of roughly half of all Americans in 2017. A congressional report found that the breach was “entirely preventable,” and caused by the company not patching known issues in its network that left it exposed; in testifying before Congress, Begor said his identity had been stolen three times.
Equifax fell to a loss in 2019 as it spent to upgrade its technology infrastructure, but has returned to profitability in each of the past two years, reporting a two-year total of $1.26 billion in earnings and more than $8 billion in revenue. Begor trimmed his outlook for 2022 profit and revenue last month, days before the company’s board granted him the one-time stock award on July 29.
An Equifax spokesperson noted in an email to MarketWatch that the board decided on the stock award before the story published, and that Equifax had been working with customers on the coding issue “for several months,” adding, “The Wall Street Journal story happened to appear on the date of our planned 8-K filing.”
Equifax shares have declined 20.2% in the past year, as the S&P 500 index
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has dropped 6.8%.
