US Bancorp CEO urges defeat of exec pay proposal Wed Mar 22, 2006 8:11 PM ET
By Jonathan Stempel
NEW YORK, March 22 (Reuters) - U.S. Bancorp <USB.N> Chief Executive Jerry Grundhofer urged shareholders in a letter on Wednesday to reject a proposal giving them a say in how the No. 6 U.S. bank pays its top executives.
Grundhofer's unusual letter, accompanied by 10 pages of backup materials, came amid growing concern among some investors and governance experts about rising executive pay, and shareholders' lack of influence over it.
The proposal from the American Federation of State, County and Municipal Employees, or AFSCME, would allow U.S. Bancorp shareholders to vote annually on an advisory resolution to approve the report of the bank's compensation committee.
AFSCME said a vote would not affect actual compensation.
In his shareholder letter, Grundhofer, 61, called the proposal "a matter of serious concern" that, if adopted, "could put U.S. Bancorp at a serious competitive disadvantage.
"We are an inappropriate target for this type of proposal, given that we pay for performance," Grundhofer said. U.S. Bancorp ranked ahead of 12 of its largest competitors in shareholder returns over the last decade, he said.
Grundhofer's compensation rose 1 percent last year to $17.98 million, including a $5 million bonus
Hey Enoughtmbs, I would like to see 35 as much as anyone as an advocate of this stock. I do think your 35 prediction is a big stretch. I think we could see 33 in the next 6-9 months dependent on: 1. USB reporting 7- 10% "CORE REVENUE" growth for the quarter and annualized without any smoke and mirrors. 2. A Fed decision in June to pause on the interest rate hikes... unfortunately, I think that the market has set the expectation fairly high that the Fed will raise it again. 3. Continued "normalization" of the yield curve... this has moved in the right direction over the past two weeks!
Lacking all three events materializing, (moon and stars lining up), I would hope the USB board would move quickly to strike a deal with HSBC or another logical suitor. A 35 or 37 merger price would look very good in late August. IMHO