Big Payday Could Be Ahead For Bank Officers And Directors
As People's Bank reorganizes, a handful of executives and directors could be in line for stock grants and options worth more than $240 million.
The Bridgeport-based bank's holding company is selling additional shares of stock as it changes its financial structure. The shares will first be offered to depositors, who have some ownership rights.
The 261-page share offer mailed to depositors last week includes a recognition and retention plan for those who run the bank that would make direct grants of stock that could be worth $172.2 million. A new stock option program could be worth $71 million.
The offer did not say who would benefit from the direct grants. Such programs are usually targeted at senior-level executives and directors.
People's started the process of converting from a depositor-owned bank to a publicly owned stock company 20 years ago, but is just now finishing.
Attorney General Richard Blumenthal said the proposed payouts appear excessive and he will ask the company to reconsider.
"The level of compensation creates no value for shareholders or depositors and raises very timely questions about executive compensation for this company and others," he said.
People's spokeswoman Valerie Carlson said the plans outlined in the offer mailed last week are not necessarily the same ones that will be brought to shareholders for a vote. She declined further comment because the bank is in a quiet period that limits what it can say before the public offering.
People's, which started as Bridgeport Savings Bank 165 years ago, said it is reorganizing so it can expand to compete with bigger banks.
Depositors, who will be able to buy stock for $20 a share if they had at least $50 in their account as of June 30, 2005, still must vote to approve the proposed conversion. That vote is scheduled for April 5.
Orders must be sent by March 22, with a minimum purchase of 25 shares and a maximum purchase of 100,000 shares.
A portion of the bank is already public, with the majority of the shares controlled by a nonpublic parent.
People's has 150 branches, many in supermarkets, and assets of $11 billion.
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