Capital One Financial Corporation, commonly known as ‘Capital One’, is an American bank holding company that specialises in giving credit cards, and auto loans, providing digital banking facilities and high-interest savings accounts. Headquartered in Virginia, the company is among the biggest companies in the United States and has earned a reputation for being a technology-focused financial institution.
The company has more than 2,000 ATMs and 755 branches, including 30 cafe-style locations. It is listed at number 99 on the Fortune 500 and number nine on Fortune’s list of the ‘100 Companies to Work For’ list. It has operations in Canada, and the United Kingdom as well. In the 1990s, the company played a key role in the development of credit cards and the product’s mass marketing. After American Express, JPMorgan Chase, Bank of America, and Citigroup, it was the fifth-largest credit card issuer by purchase volume in 2016.
Capital One is the second-largest auto lending company in the United States, behind Ally Financial, formally known as GMAC, with a 5% market share.
Capital One mainly focuses on three divisions that are credit cards, consumer banking, and commercial banking. In the fourth quarter of 2018, 75% of the company’s revenues were from credit cards, 14% were from consumer banking, and 11% were from commercial banking.
In the fourth quarter of 2022, the company’s net worth was USD 2.4 billion and USD 5.41 per diluted common share, compared to the third quarter which was USD 1.7 billion and USD 4.20 per diluted common share. The net income in the fourth quarter of 2021 was USD 2.4 billion and USD 5.41 per diluted common share. For the fourth quarter of 2022, adjusted net income was USD 2.82 per diluted common share.
As Capital One is the second largest company in the United States when it comes to providing financial services, the brain behind making it this successful is 72-year-old American billionaire businessman and CEO of the company, Richard Fairbank. He founded Capital One with Nigel Morris in 1994.
Who is Richard Fairbank?
- Richard Fairbank was born in California, United States in 1950
- He completed his degree in economics from Stanford University in 1972 and later got an MBA degree in 1981
- Richard Fairbank has had a base salary of zero dollars since 1997; his salary comes from stock and option awards
- He served on the board of directors of MasterCard International from 2004 through 2006
- In 2006, Richard Fairbank received the Excellence in Leadership award from Stanford University
- He is a member of the Stanford Business School advisory council, the Financial Services Roundtable, and the board of directors of the BITS Technology Forum
- While being the CEO of Capital One in 2009, Richard Fairbank earned a total compensation of USD 6,076,805, which included no base salary, no cash bonus, USD 2,000,019 in stock awards, USD 4,000,001 in option awards, and USD 76,785 in other compensation
- In 2012, his total compensation was USD 22.6 million
- In 2018, the net worth of Richard Fairbank rose to USD 1.1 billion, when his company shares reached a record high
- He was awarded the “Business Leader of the Year” by Washingtonian, and placed on lists including Worth’s list of the top 10 CEOs and “50 Best CEOs”
- Richard Fairbank has eight children and lives at Overlook Farm, near Gunston Hall on the Potomac River in Virginia, USA
Capital One Maintaining Strong Credit Card Presence
Credit cards are the main product of Capital One. The majority of the bank’s revenue comes from it. Because of credit cards, bank continues to develop in this field, especially when the competition around rewards continues to heat up.
In 2021, the bank launched Venture X, a new card with a travel-centric focus. It was created to capitalise on a rise in consumer travel (before Russia’s invasion of Ukraine) and to compete with existing high-end cards like Chase Sapphire Reserve and American Express’ Platinum card. The USD 100,000 dollars sign-up bonus credit card, which has an annual fee of USD 395 dollars, was unveiled in conjunction with the announcement that Capital One will launch three airport lounges to cater to a similar demographic.
“In the card business, competition has definitely intensified especially in rewards. We saw some modest increases in upfront bonuses mainly in the form of limited-time offers and in travel as demand returns,” Richard Fairbank said.
Richard Fairbank is one of the longest-serving CEOs with 28 years at the helm of Capital One. There has been no public discussion about his succession plan, and it seems Fairbank will remain in that position for the foreseeable future.
Image Credits: Capital One