For MNC executives, financial windfall fades
Last year was a remarkably rewarding year for MNC Financial Inc.'s stockholders, but not quite so rewarding for its top executives, according to the company's just-released proxy statement/merger prospectus.
That may seem odd, given the turnaround that saw a $70 million loss in 1991 give way to a $35.5 million profit last year (excluding accounting changes). The reason: MNC's board weighted 1991 compensation more heavily toward stock options. Last year it shifted to cash.
For example, President and CEO Frank Bramble received $400,000 in salary and 500,000 options in 1991. Because the stock climbed from $4.22, when the options were granted, to yesterday's price of $14.50, those options are now worth almost $5.1 million.
In 1992, Mr. Bramble received 100,000 options (at an exercise price of $8.4375, they're now worth about $594,000). Meanwhile, his pay rose to $519,231, and he received a $500,000 bonus.
If Mr. Bramble and the other executives don't exercise the options by the time of the merger with North Carolina-based NationsBank Corp., they'll convert to NationsBank options.
Incidentally, one official apparently unwilling to wait is Executive Vice President Susan C. Keating, who last month cashed in options and then sold 30,000 shares of common stock. Through a spokesman, she declined to comment.
Provident Bank creates consumer finance unit
Provident Bank of Maryland, like many colleagues, has decided to join 'em rather than beat 'em. The company said this week that it has created a consumer finance subsidiary, called Provident Financial Services Inc.
The unit will try to reach "customers who may not be served by traditional bank lending criteria," Provident said, using a polite phrase for people with spotty credit histories.
Jack Novak, who heads Provident's consumer lending division, is chairman and chief executive officer of PFS; Tim Brown is president and chief operating officer.
PFS will focus on four areas initially: unsecured credit, fixed-rate home equity loans, boat loans and portfolio acquisitions. Provident said it is considering opening PFS storefront outlets around the state.
NationsBank-MNC deal begins comment period
NationsBank may have told the world back in February that it plans to buy MNC Financial, but it told the Federal Reserve Board two weeks ago. On Tuesday, the board officially accepted the application.
So what? Well, the Fed's acceptance of the application (and the publication of that acceptance in the Federal Register this week) started the clock ticking on a 30-day public-comment period.
"In the [Community Reinvestment Act] world it's kind of all-important," said Tom Chalkley, a staffer with the Maryland Alliance for Responsible Investment. He was referring to the federal law that, among other things, gives groups such as the alliance leverage when asking big banks to boost community lending.
It was back in 1987 that NationsBank last came to Maryland to acquire a company, the former Centrabank. The alliance dropped the ball that time and failed to get involved in the process. But Mr. Chalkley says his group now plans to be heard.
"We are communicating directly with [NationsBank Chairman] Hugh McColl, and asking him to meet with us, to discuss building upon our existing agreement with MNC," Mr. Chalkley said. If all goes well, the alliance won't have any need to make a public comment on the merger, he adds.
NationsBank spokesman Ellison Clary says the company has not received the alliance's letter, but some NationsBank officials have talked with the group.
AT&T; Universal Card hires Signet executive
David K. Hunt this week moved from a big pool to a small ocean. The head of Signet Banking Corp.'s credit card operation, which has 2 million accounts, was named president and CEO of AT&T; Universal Card Services Corp., the nation's second-largest credit-card issuer, with 11 million accounts.
At Signet, Mr. Hunt supervised an organization with nearly $3 billion in receivables. The AT&T; Universal Card, a combined general-purpose credit card and long-distance calling card, last year generated $19 billion in charges.
"I'm well-aware AT&T; started Universal Card Services as a way of deepening its relationships with its long-distance customers," Mr. Hunt said in a statement. "That will remain our strategy -- and I will be personally committed to the continued success of the Universal Card."
At USF&G; meeting, chairman rallies troops
This year's award winner for the most thorough annual meeting goes to USF&G; Corp. and its chairman, Norman P. Blake Jr.
For nearly two hours yesterday, Mr. Blake led several hundred shareholders through an eye-glazing journey of charts and graphs about the insurance company's notable turnaround since he came on board in late 1990.
They were broken up by no fewer than a half-dozen video segments of USF&G; employees extolling the virtues of their "new" company.
"That's dynamite stuff," he said after one of the videos. "If you don't like it, I certainly do."
He introduced "cast" members and gave a technical award to the guy who made the video.