The story, from Reuters, is similar to one posted on Yahoo, which says the SEC is going to make it much easier for individual shareholders to get their issues on the annual shareholder proxy vote. Previously, management had a stranglehold on the issues on which shareholders vote, and routinely denied individual requests to put an issue before the entire shareholder body.
I'd love to see a resolution along the lines of "executive management of the company can be paid no more than X times the average annual employee salary." BBT execs are not the greedy bastards of, say, TYCO or CITI, but they still don't mind giving themselves nice raises while everyone else does with cost of living adjustments.
Make a buck,
Just in case you are referring to the options that I had said were issued in 2000. These are the options on BBT's SEC filing DEF14A dated March 16,2001.The heading above the 638,494 options state they are BBT option grants last fiscal year and the expiration date is 2/23/10. There were a total of 638,494 options granted at a price of $23.9375.From the date I assume they were given 2/23/00 with a ten year expiration.
If anyone has been mislead I'm sorry. Sure did not mean to mislead anyone. I had posted this earlier including the DEF14A information and date.
By the way I agree with your position on options being a great incentive for mid-managers. However in this same filing under the column % of total options granted to all employees in fiscal year the percentage of the total given to just the top six executives was 36.04%. Hope there wasn't a lot of mid-managers. This appears that all 14,000 (the 14,000 is a genuine guess) of the other employees would have to share the balance of the 63.96% of the total options issued. Which group do you think contributed more to the growth of the company ?
Thanks for the info,
The stock option grants are made each year on or about February 27. The price of the stock has no bearing on the date the options are granted. They are always granted on or about February 27 each year. If the price is high, the employees must work harder to make them pay off. If they are low, the employees benefit quicker. You make money on some grants and some are worhtless for a number of years. This is an excellent benefit for most mid-managers and one that helps BB&T retain good employees in the mid to upper levels of management. Without good benefits, you lose good employees to other companies.
My original point was and still is that BBT stock was over $40 a share in December, 1998. Any person who bought the stock at that time would have a $40 cost basis in that share of stock. I know that options are issued at market price. My question was and still is why did BBT issue over 600,000 options to the top six executives for the 22/23 price.
Can't think of any common sense reason that anyone should be able to cost an owner(shareholder) a decrease in value of 42% and be issued 600,000 options at the new market price. Where is the incentive behind this? Appears that JA and guys are well paid and get options regardless of what the value of a share of stock is.
So let see the shareholder has a $40 investment, but the executives have no money invested. When and if the share price returns to $40 the shareholder is close to even on his investment, but the executive has $17 profit on no money invested. Which in this case is something over $10 million.I guess this makes sense to someone, but not to any investors I know.
Hope this clears up the point I was trying to make.
I agree with some of what you are saying about comparisons. What would be a fair comparison?
However, my position is that I need to make money on my investments in all markets including recessions.
Would the two banks on each side of them on the top 100 banks list of US banks be a fair comparison? If so who would they be ?
It still appears to me that the top executives are being more than well paid for the results the last five years. How can they hold the employees to an average annual raise of much less than they receive and then take these kinds of salaries, bonuses, Long Term Incentives and stock options for themselves? Rumor has that in last few years that they have held the raises for regular employees to an average of 3%.
I just feel that if the shareholder who owns the company suffers then everyone including the executives should suffer with the shareholders.
Would love to have your ideas on the comparable banks.
The problem with your argument is that the executives don't buy the options as they are given to them by the company. They do not have any of their own money invested in options whereas shareholder who have bought stock does.
The shareholders get some percentage return on their investment on the shares if they increase, but on the options every penny about the option price is pure profit to the option holder. Some of the earlier posts were about the stock being over $40 a share in 1998, but the company issued over 600,000 options to the top six executives according to the 2000 proxy statement for that year alone.
If you would like to read some of the previous posts it would reveal more of what the conversation is about.
Hope this makes sense to you.
I've very patiently and gently tried to tell you that options are issued at market. You persist in declaring otherwise quoting 23 options when the price was 40 earlier.
Now, for the last time, you're wrong! The proxy you quote says options were issued at market in 2000. If you had checked the Yahoo price chart for five years:
you will see the stock dipped to 22/23 and change in February which apparently was the issue month of the options you question. As I said earlier, you could have bought them the same day and had the same gain as the execs. IMHO, we posters owe it to the board to do the homework to get facts straight.
I've held BB&T over 30 years because I trust management and agree with the strategy. If you don't trust or agree, why not sell and buy one of the other names you like.
Jim, with all due respect, all I'm saying is that there are other methods of measuring the performance of a company. Certainly, we all own the stock to make money, regardless of the time horizon. Personally, I don't think you can look at the last 5 years and determine the success of any company, especially during the middle of a recession. As to comparing BBT with Citigroup, BAC and WB, if you look at the size of their assets, I'm sure that you would agree that they are substantially larger.
As for the stock prices, check out this comparison(according to Yahoo). If you look at Suntrust, Southtrust, Amsouth, Regions, FifthThird, PNC and National City, not one of them trades at a higher price than the Dec 98 date that you reference. Just my opinion.
Even though the executive (as well as almost every other employee) received stock options at a price of $23.975 in 2000, this doesn't guarantee that it automatically makes a person rich. This just means that they can buy later on these options at this price. I have been with companies that have given options at a price and then the bottom falls out of it. The executives, just like a stock holder have the option to buy and sell whenever they wish. I know that I am new at this and I by all means don't want to step on any toes, but it seams like it isn't a fair argument saying that the executives received stock options so they got rich while the share holder didn't do anything. I think if we do as JA has said and slow down on the aquisitions, then the stock will most definately start rising to everyones advantage. In the last 5 years, BB&T has just been going crazy with them (aquisitions) and the stock has been doing the same thing. JMHO
Maybe I'm just dense, I just don't understand some of your arguments. You said it is unfair to compare BBT to the larger banks, but then you say that BBT getting bigger is such a great thing. Not interested in size near as much as I'm interested in making a good return on my share prices.
Are you saying that all big banks stocks perform better than smaller banks? I thought that it was easier to turn a small ship verus a big ship.On your comment about a $70 share price I'm just waiting for them to return to their price per share of $40.3125 reached in Dec. 1998. Speaking of which just how long do you figure for long term investing? Looks like we are coming up on 5 years and the share price today is $36.93. Not much of a return on an investment for almost 5 years, including the dividends will not get you into the plus column on your investment by very much. I personally would not call 5 years just in and out trading. Would you?
Something else I've noticed on your comments about their size and not wanting to get bought. Over the years when small banks have been bought out the shareholders usually get a windfall from their shares increasing in price because of the offer to buy them being at a premium price. Is this bad? How long do we have to wait to see if the company's strategy pays off ? 5, 10, 15, 20 years? Sure looks like 5 won't do it.
You also stated that in your investments you wanted either the company to be growing or the share price to be increasing. My position is that in a really good company there should be both.
My original post raised the question of why is the company giving hundreds of thousands of stock options each year salary increases, bonuses and Long Term Incentive Pay increases to the top six executives regardless of how the stock price performs. This is happening even when the stock decreased from $40.375 in Dec,1998. Options were issued in 2000 at $23.975. Shareholders including myself might have the right to be bitter. I thought the reason for investing was to make a good return, not to enrich the executives.
You mentioned that I might might have other motives behind these posts. You sure are coming on strong in defense of BBT. Do you have other motives? Is it possible you are connected to them?
All revolutions through out history have been started by just two people talking. Simple everyday people can and do make a difference every day.