I wish HCBK management would act like this and hope the Board learns something from this story.
What a total screw-up HCBK BOD and Management has become or should I say we should have recognized this all along. One of the arguments put forth by some is that this interest rate environment does not justify expanding the balance sheet. If you accept this notion then you cannot help but wonder what all those highly paid HCBK loan officers are doing, really? From what I vaguely recall when I read an annual report long time ago, HCBK employees have a stock plan and a pension plan. Who is going to fund this pension? I raised the issue in my 7/31/2013 post that it is really surprising to see how HCBK BOD awarded a compensation package to Hermance and other top officers that is 10 times the size of pay packages of MTB CEO! I am all for competitive pay packages and performance bonuses provided there is something to show to your shareholders. Meanwhile we have had to undergo two brutal dividend cuts and as far as I recall, neither Management nor employees have had to make any sacrifice. How #*$ backwards is this? Why do we approve these pay packages year after year and reelect this BOD even when shafted by them? It really makes you wonder whether this BOD cares about us at all. Even when times were good and Hudson was making oodles of money, It makes you think whether all those profits were a result of favorable business environment or made to look like a result of superior management. If you think that it was as a result of superior management, then you will have a hard time reconciling the fact that the management totally mismanaged the interest rate risk. This is what bankers do day in and day out! This is their job. Where are those activist, pension fund, and hedge fund managers when you need them? It is time for a wholesale change. It is so screwed up, it is not even funny.
I agree. In my Aug. 2013 post, I raised the issue of management comp. I feel that their comp. is atrocious while shareholders had to go through two dividend cuts. Why are shareholders approving these hefty pay packages year after year with no cuts in pay or head count? One of the arguments is that it is not their doing but that they are in a bad business environment. If that's the case how does one justify these pay scales? Hermance is paid 10 times more than MTB CEO! If the interest rate environment is such that it is not profitable to expand the balance sheet, then what are all these loan officers doing, really? From what I vaguely recall, these guys have a pension plan! Who is going to fund these pension? Where is BOD on this?!! Just look at their corporate governance score on a yahoo profile page. It is the worst rating one can get. Where are the activist shareholders, hedge fund managers? This is so #$%$ backwards, it is not even funny. I am just afraid a lot of IPO shareholders are going to be left holding a leaky bag of S#@t.
Just look at Yahoo's profile page for POT http://finance.yahoo.com/q/pr?s=POT+Profile
Key Executives Pay Exercised
Mr. William J. Doyle , 62
Chief Exec. Officer, Pres and Non Independent Director 2.24M 48.30M
Mr. Wayne R. Brownlee , 60
CFO, Principal Accounting Officer, Exec. VP and Treasurer 952.00K 19.95M
Mr. George David Delaney , 52
Chief Operating Officer and Exec. VP 857.00K 3.58M
Mr. Joseph A. Podwika , 50
Sr. VP, Gen. Counsel and Sec. 637.00K 0.00
Dr. Stephen Francis Dowdle Ph.D., 62
Pres of PCS Sales 641.00K 6.60M
Amounts are as of Dec 31, 2012 and compensation values are for the last fiscal year ending on that date. Pay is salary, bonuses, etc.Exercised is the value of options exercised during the fiscal year.
Currency in USD.
and these people are selling fertilizers! They are operating in a crumbling oligopoly environment. Wow, the compensation committee must think that they are either geniuses or hedge fund managers. The only chart that the prospective investor needs to look at is the one above to determine whether they are going to laugh or cry all the way to the bank.
Consider these facts.
2Q 2013 Income = $48.7 million = Approx. $200 million when annualized
Top Management Compensation per yahoo profile page = $10+ million or 5% of Annual Income
Hermance's compensation = $4.07 million = 2% of Projected total net profit
Robert Wilmers' compensation = $2.712 million = 0.2% of Projected total net profit of $1,392 million (based on 2Q 2013 reported profit of $348 million)
So HCBK's Board thinks that Hermance should get 10 times more than the CEO of MTB for delivering a lousy performance.
The Board was quick to cut shareholder dividends twice but if you look at HCBK's top guys' pay packages, you would think that they are doing a terrific job!
Just look at HCBK's ISS Governance QuickScore as of Jul 1, 2013 on its yahoo profile. It is 10, the worst possible rating it can get.
Who do they think they are, Hedge fund Managers?