Ten years ago governance problems of this kind were far more common than they are today, but at “the bank that time forgot” these dinosaur governance practices live on

1. Analyst Alert
from The Corporate Library
High Risk Alert
BankUnited: A company bypassed by the governance revolution
BankUnited Financial Corporation is a case study in problematic governance. Alfred R. Camner has served as
Chairman and Chief Executive Officer of BankUnited Financial for the last 15 years and held the same posts, among
other executive titles, at the company for the past 24 years. He has also served as Chairman and Chief Executive
Officer of BankUnited, FSB, or “BankUnited,” a wholly-owned subsidiary of BankUnited Financial Corporation, since
1984. As if this combination of roles and tenure were not enough to raise concerns about the proper balance of power
on the company’s board, leadership of BankUnited and its subsidiary is not Mr. Camner’s only full-time job; he also
heads up the well-paid law firm that serves both BankUnited Financial and BankUnited as general counsel. Mr.
Camner’s complex commitments, moreover, are just the beginning of BankUnited’s governance issues.
A family affair
BankUnited Financial Corporation is 42.17 percent owned by the Camner family, through shares held by founder and
CEO Alfred R. Camner and his daughter, director and employee Lauren Camner. There are three classes of shares
at the company, with Camner family interests owning roughly 95 percent of the Class B common stock and Series B
Preferred stock, and with disparate voting rights allocated to each of these classes. In fact, Class A Common Stock
has one tenth of a vote per share, Class B Common Stock has one vote, and Series B Preferred Stock has 2.5 votes.
A cursory glance at the description of voting rights would not necessarily reveal that Series B Preferred stock – that
owned by the Camner family – has 25 times the voting power of the publicly-tradeable common stock. As the proxy
notes in a finely-tuned understatement, “beneficial ownership is not indicative of voting power.”
Lauren Camner, in addition to serving as a board member, currently serves as Senior Vice President, Customer
Integrated Solutions Group for BankUnited Financial and BankUnited and earned approximately $213,000 during
fiscal 2007, down from the $258,000 she earned in 2006 when she was Senior Vice President, Alternative Delivery
Channels. She previously served as Senior Vice President, Investor Relations and Alternative Delivery Channels
during 2005 and 2004 earning $144,000 and $110,169, respectively. She has served as a member of the board of
directors since 2004.
Errin E. Camner, also a daughter of Alfred Camner, is not on the board of directors of the company but is hardly
independent of involvement with the company. She serves as Managing Director of Camner, Lipisitz and Poller,
Professional Association, attorneys-at-law, where Alfred Camner has served as Senior Managing Director since 1996.
According to the most recent proxy statement:
During fiscal 2007, we and BankUnited retained the law firm of Camner, Lipsitz and Poller, P.A., (“CLP”) as
general counsel. Alfred R. Camner, our Chief Executive Officer and Chairman of the Board and of
BankUnited, is the Senior Managing Director of Camner, Lipsitz and Poller, P.A. During fiscal 2007, we paid
CLP approximately $4.9 million in legal fees allocable to corporate, securities, regulatory, litigation and real
estate matters.
This is also not the first year such an arrangement has been in place. In fact, since the first full proxy filing submitted
by the company in fiscal year 1998, BankUnited Financial Corporation and BankUnited have paid more than $30
million in retainer fees to this company led by their CEO and his daughter.
1

2. Analyst Alert
from The Corporate Library
Retainer paid to Camner, Lipsitz and Poller, P.A. as General Counsel (Source: SEC Filings)
2007 $ 4,900,000.00
2006 $ 3,600,000.00
2005 $ 3,500,000.00
2004 $ 3,400,000.00
2003 $ 3,700,000.00
2002 $ 2,300,000.00
2001 $ 2,100,000.00
2000 $ 2,500,000.00
1999 $ 2,700,000.00
1998 $ 2,200,000.00
Total $30,900,000.00
Additional board concerns
There are a number of other features of the board of directors that cause it to be insulated against accountability to
shareholders. The board is classified, meaning only a few directors are up for election in any given year, making it
impossible to replace the board as a whole, regardless of performance. Directors are also elected by a plurality of
votes cast instead of a more favorable, shareholder-friendly majority vote policy.
In addition, four out of the company’s 11 directors have a tenure of 23 or more years of service on the board, with two
of them being insiders. Such long tenures suggest entrenchment both of the board as a whole and of key committees.
For example, Allen M. Bernkrant, a 77-year-old independent director, has served on the company’s Audit,
Compensation, and Corporate Governance and Nominating Committees for the past 23 years.
Related party transactions
As might be expected at such a company, the proxy statement is littered with related party transactions. In addition to
the family connections already discussed, Marc D. Jacobson, a former secretary and current director of both
BankUnited Financial and BankUnited, is currently a senior vice president of HBA Insurance Group. According to the
company’s most recent proxy statement:
During fiscal 2007, HBA Insurance Group, received approximately $319,000 in commissions on premiums
paid for ours and BankUnited's directors' and officers' liability, professional liability, banker's blanket bond,
commercial multi-peril, E-commerce and workers' compensation insurance policies, as well as, premiums for
health and dental insurance.
Much like the arrangement with Camner, Lipsitz and Poller, P.A., this relationship extends as far back as BankUnited
Financial’s proxy filings. Throughout this relationship, according to the company proxy filings, HBA Insurance Group
received more than $2 million in commissions related to director and officer insurance.
Not only is there a lucrative relationship between the company and Mr. Jacobson, there used to be one with his wife,
according to BankUnited Financial’s 2005 proxy statement:
During fiscal 2004, American Central Insurance Agency (“American Central”), of which Mr. Jacobson's wife is
the president and owner, received approximately $131,000 in commissions on premiums paid for health and
dental insurance policies obtained by the Company and BankUnited through that agency.
Again, this relationship spanned several years. When the relationship started in fiscal year 2000, the commission for
the insurance premiums was $46,300 which increased to $60,966 the following year, $111,400 the next year and
$131,000 for each of the 2003 and 2004 fiscal years for a total of more than $480,666 in commissions.
The company believes that such commissions are comparable to those that would be paid for policies obtained
through other agencies with which they have no affiliation.
2

3. Analyst Alert
from The Corporate Library
Compensation travails
It should come as no surprise that not only has the governance revolution that helped create more independent
boards bypassed the company, but so have all the improvements in compensation practices that we have seen in the
broader corporate world. The compensation policy for the CEO, in particular, contains quite a range of examples of
poor governance. These include quarterly performance bonuses, equity compensation using super-voting stock, a
range of perquisites that – although considered “limited” by the company – would be considered generous for the
CEO of a far larger organization, and excessive potential severance arrangements.
To start, the CEO was eligible to receive quarterly bonuses of up to $350,000 each in 2007. This maximum has been
raised to $800,000 for 2008. The quarterly bonuses are based on the following measures:
…total assets, total deposits, diluted earnings per share, residential and consumer loan production, loan
balances, net income, total loans and credit quality for each quarter. In addition, the goals for the second and
third fiscal quarters included targets for non-interest bearing deposits, the efficiency ratio and book value per
common share.
None of the other executive officers are eligible for these quarterly bonuses, and, given the strategic responsibilities of
the CEO, it is not appropriate for him to be focusing on such short-term operational performance.
Additionally, not only is the CEO’s quarterly bonus based on the aforementioned set of metrics, but so too are his
annual cash incentive of up to $1,700,000 and his performance-restricted stock award. This raises the spectacle of
the CEO being rewarded three times for the same set of short-term achievements. Indeed, this occurred in 2007,
when he received three quarterly bonuses, an annual bonus and three sets of restricted stock.
Super-voting stock options
Also unusual, and different from compensation policy for the other executive officers, is the use of super-voting stock
to compensate the CEO. Almost all of the CEO’s outstanding equity awards have been made in Series B Preferred
Stock. Each share of Series B Preferred not only has 25 times the voting power of a share of common stock, but it
also is convertible into 1.4959 Shares of Class B Common Stock, which can then be converted into one share of
Class A Common Stock. So the CEO’s 2007 stock option award of 160,000 Series B Preferred is actually a stock
option of almost 240,000 options. Likewise, the CEO’s 2007 restricted stock award of 105,000 is actually just over
157,000. We cannot think of any other company that makes a practice of regularly awarding equity compensation in
the form of super-voting stock.
“Limited” perks?
In addition, dividends on the unvested shares of Series B Preferred make up the largest part of the CEO’s substantial
“All Other Compensation” – the figure that generally represents perquisites and other benefits. Out of a total amount
of $378,445, the dividends represent almost half. The complete list of perks and benefits are given in a footnote in the
proxy, and includes:
$173,891 of dividends paid on restricted shares of Series B Preferred Stock, $102,444 for life insurance
premiums, $39,375 for cash director’s fees, $13,076 for medical insurance premiums and a $7,875
contribution to the 401(k) Profit Sharing Plan. Also includes our incremental costs for personal benefits
provided to Mr. Camner including $17,228 for country club memberships, $10,298 for automobile expense,
$8,681 for travel expense and $5,577 for sporting event tickets.
The compensation discussion and analysis indicates that:
We believe that perquisites should not constitute a significant portion of the compensation package…. While
we have limited our perquisites, we recognize that certain perquisites, such as club membership dues,
provide a benefit to us as they enable and encourage executives’ participation and visibility in the community
and promote business development and BankUnited’s mission as a uniquely local, neighborhood, community
bank.
But the amount for “All Other Compensation” is almost as much as Mr. Camner’s base salary. It is more than 10
percent of his total annual compensation, and the list of items included in the figure does not appear to be particularly
limited, nor is it inclusive of all the benefits and perks that are provided. Furthermore, while it is common for CEOs to
3

4. Analyst Alert
from The Corporate Library
sit on their own company’s boards, it is extremely uncommon for them to receive directors’ fees for doing so, even if
they sit on the bank’s board in addition to the holding company’s board.
Gold-plated parachute
Finally, Mr. Camner’s employment agreement contains unusual provisions for termination benefits. Estimates of his
severance benefits contain a cash payment that, at $22.6 million, exceeds the value of accelerated equity in the
package, and would trigger an excise tax gross-up of $11.6 million. This is because the cash payment is based not on
a customary maximum three years, but on five years of the highest salary, highest bonus, and highest restricted stock
payment. The only positive side of the company’s contractual obligations to him is that, although all of the other
named executive officers receive a cash payment on a change of control even if they are not terminated, Mr. Camner
does not.
Conclusion
Ten years ago governance problems of this kind were far more common than they are today, but at “the bank that
time forgot” these dinosaur governance practices live on. Given the bank’s recent performance, however, and its high
ratio of non-performing loans to total assets, it is uncertain for how long it will survive. Already rated a high concern by
The Corporate Library, following the issuance of the most recent proxy in January 2008 and the board’s continued
resistance to change, the company was downgraded to our most serious level of concern.
Paul Hodgson, Senior Research Associate
Greg Ruel, Research Associate
July 18, 2008
4

5. Analyst Alert
from The Corporate Library
For more information about The Corporate Library and our products and services, please contact us:
877 479-7500 toll free U.S.
207 874-6921 outside U.S.
sales@thecorporatelibrary.com
www.thecorporatelibrary.com
You may also be interested in these reports available from The Corporate Library:
Individual Company Profiles ($495 each)
BankUnited Financial Corporation
The Corporate Library’s Preliminary CEO Pay Survey: CEO Pay 2008 ($45)
The Corporate Library’s Preliminary CEO Pay Survey is based on compensation data from 614 U.S.
Companies that filed proxy statements in the first quarter of 2008. The survey finds that CEO pay
increased at a much higher rate at large companies than at smaller firms, with a median increase in
total actual compensation of almost 16 percent in the S&P 500, compared to a median increase of
only 2 percent at other companies. As interest in CEO compensation analysis has increased, we have
substantially discounted the pricing on this report to make it more accessible.
By: Paul Hodgson, Senior Research Associate
Published: May 2008
Updated Analysis of Clawback Policies ($125)
Clawback provisions are nearly four times more common at S&P 500 firms than at smaller companies,
according to this updated analysis on the prevalence of clawback provisions at U.S. and Canadian
public companies. The new report includes the list of all 329 companies that have a clawback
provision, the type of provision, and the text describing the provision excerpted from the latest proxy
statements.
By: Paul Hodgson, Senior Research Associate
Published: July 2, 2008
© 2008 The Corporate Library, LLC. All rights reserved. No part of this publication may
be reproduced, republished, altered, posted, transmitted, or distributed without written
permission from The Corporate Library, or, in the case of photocopying, under the terms
of a license issued by The Corporate Library. Additional copies of this publication may
be purchased from The Corporate Library’s online store at
www.thecorporatelibrary.com.
5