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Hudson City Bancorp, Inc. Message Board

  • traderthetraitor traderthetraitor Jun 21, 2006 12:29 PM Flag

    Another 70 Mil. Buy Back Shares

    Another Stock Repurchase of 10% of the outstanding shares of stock has been authorized.
    Query: Is this good or bad for us small fry shareholders?
    My Opinion: The stock buy back of some 70 million shares is necessary to pay for the Officers' and Directors' recently approved INCENTIVE PLAN, and will benefit only the Big Fish to the detriment of us Little Guys.

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    • You are correct and I am wrong.

    • I think the restricted stock comes with a vesting schedule, usually 20% a year for 5 years. Once vested they become taxable unless the recipient makes the 83(b) election thereby making it all taxable upon receipt. Then you have to pay the tax up front but when they vest you pay nothing until you sell. If you held it one year or more than they get capital gains tax rate. Correct me if I'm wrong.

    • I disagree on benefit. We voted against the Incentive plan, because we have decided to vote against all plans that provide for resticted stock, as opposed to only options. That said, I'd rather see HCBK use excess capital to repurchase shares at these levels. This really helps the balance sheet. And I'd rather see them use these shares to fund options and RRP shares, since the alternative is issuing new shares to fund grants.

      In the couple of years after a conversion, most well run shops repurchase as many shares as possible, unless the market is really screwy. This is necessary to off-set over capitalization caused by the requirement to sell at the super max.


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