April 26 2016
Astoria Financial
Corp’s Shareholders Vote Against Pay for Executives in Merger
Astoria Financial shareholders are less than thrilled at the
amount their top executives are receiving in the merger between Astoria and New
York Community Bancorp (NYCB). In a press
release issued today, NYCB’s President and CEO Joseph Ficalora stated that
over 97% of the votes cast at the NYCB meeting were in favor of the vote. Astoria’s shareholders actually voted 98.35%
to approve the merger.
The one topic that wasn’t addressed in the press release,
but is detailed in the 8-K
is that only 37.9% of Astoria shareholders voted in favor of the payments to be
received by Astoria’s executives.
That puts them at number 11 on the list vote failures for
executive compensation approval, according to Spectrum Analytics. In other words, only 10 deals voted on since
2011 had a worse voter response to their executive pay. (One of those was the Jarden/Rubbermaid vote
that I reported
on last week).
Shareholders can accept the equity payments that executive
have built up over their tenure at a company.
But, Astoria’s top 5 execs are receiving an aggregate of nearly $300K in
cash for just completing the merger (albeit a minimal amount) and CEO Monte
Redman and CFO Frank Fusco are receiving gross-up payments of $3.8 mil and $2.1
mil, respectively. These are single
trigger events: payment upon deal
consummation.
A gross-up is a type of payment made to offset taxes that
will be payable upon receipt of the aforementioned cash payments. The amounts disclosed may be materially
different than the amounts received by executives.
Since the vote on executive compensation is advisory, and non-binding,
it is very much like going into business with Paulie from Goodfellas: You don’t like how much I make? F**k you.
Pay me!
Mark Siciliano
