The Conservative Cave
Current Events => Economics => Topic started by: Duke Nukum on April 29, 2008, 09:35:24 PM
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Investors hold National City execs' feet to fire
Criticism marks annual meeting, one week after bailout
Tuesday, April 29, 2008 12:09 PM
By Jeffrey Sheban
THE COLUMBUS DISPATCH
CLEVELAND — Angry shareholders turned out in droves today to grill National City Corp. directors and executives at the company's annual meeting.
It was the first public appearance for the board since agreeing to a $7 billion bailout last week. Chairman and CEO Peter Raskind defended the decision to issue new shares to outside investors led by the New York buyout firm Corsair Capital.
The Cleveland-based bank is facing hundreds of millions in losses from high-risk mortgages.
The cash infusion saved National City, which has 1,900 employees in central Ohio, from possible collapse. It further depressed the value of company shares, which have dropped by 80 percent since July.
Raskind acknowledged that shareholders have suffered.
“We are acutely aware of the pain that you as shareholders have incurred,†he said.
He then took more than 30 questions from among the 200 shareholders filling three auditoriums.
“This is not the way you are supposed to run a bank,†shareholder Howard A. Kline said after the meeting.
link (http://www.dispatch.com/live/content/business/stories/2008/04/29/national_city.html?sid=101)
This story interests me from the POV of the shareholders holding the feet to the fire. I wish it contained some info on the compensation for the bank's executives.
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It is interesting from the shareholders' point of view. It is also interesting from a bystander's point of view because I cannot help but wonder why shareholders are so befuddled and outraged when the over-inflated stock they are holding takes the inevitable tumble. Are they mad at themselves?
No, making risky loans is no way to run a bank, even with outside pressure demanding the risky loans be approved. Risky investing is no way to run a personal portfolio, either. I say there is plenty of blame to go around.
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It is interesting from the shareholders' point of view. It is also interesting from a bystander's point of view because I cannot help but wonder why shareholders are so befuddled and outraged when the over-inflated stock they are holding takes the inevitable tumble. Are they mad at themselves?
No, making risky loans is no way to run a bank, even with outside pressure demanding the risky loans be approved. Risky investing is no way to run a personal portfolio, either. I say there is plenty of blame to go around.
I would still be interested to know the compensation packages and if the shareholders have any sort of punitive action they can take or if they gave the team the store when they hired them.
I'm always befuddled by CEO's who get million dollar bonuses whether they perform or not. If all I have to do is show up to a group of shareholders and say, "I'll be your CEO, I want a $50 million dollar bonus if I make you a profit and a $100 million bonus if I run your company into the ground and if you want me to go away, that will be $700 million, please?" Then that's going to be my next job.
'Cause it always seems like shareholders are idiots and in this case it seems like they know the management team screwed up. So, what makes this time different? Or is it just because a lot of these are shareholders because it's a home town company and it is a matter of home town pride being hurt? This story is way too brief.
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the Wamu meeting just recently went the same way, only they ousted two guys off the board.
i do find the multi million dollar pay outs suspect.. especially when the banks are having to get these billion dollar cash infusions from outside investors.