"GLENDALE, Calif.–Is the disappearance of thousands of smaller credit unions being hastened, at least in part, by CEOs at those institutions taking sweetheart financial packages being offered by acquiring credit unions?
The CEOs of two small California CUs who have been in a public spat with a much-larger CU that they believe is seeking to force them into mergers, say they believe that is the case.
John Drake, CEO at the $110-million Schools FCU in Rancho Dominguez, Calif., and Stuart Perlitsh, CEO at the $355-million Glendale Area Schools FCU here, told CUToday.info that small credit unions with solid capital are not just surrendering to heavy marketplace pressures from big credit unions, such as that which they have felt from the $11.2-billion SchoolsFirst FCU, with which they have been in a dispute, but that in many cases CEOs at small CUs are throwing in the towel thanks to lucrative SERPs or limited-year contracts offered up by the acquirer.
“I am aware of some aggressive predatory credit unions that essentially see a credit union with a net worth totaling $10 million that will offer the CEO a salary contract of say $250,000 per year for three or four years if they fold,” said Perlitsh. “So the CEO takes the bait and the big credit union scoops up the $10 million.”"
“The merged CUs’ CEOs love it—they get some major pay to watch the grass grow for a few years,” said Perlitsh. “The board of the acquired institution might pick up a board seat, or get appointed to some ‘marketing committee’ or ‘technology committee’ with a tidy little conference travel budget. Everyone wins, except the members.”
Perlitsh wondered if members of the small credit union would vote to approve the merger if they knew the CEO and board members were getting “juiced” in the process
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Sweetheart Financial Packages Hastening Small CUs' Demise?:
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The CEOs of two small California CUs who have been in a public spat with a much-larger CU that they believe is seeking to force them into mergers, say they believe that is the case.
John Drake, CEO at the $110-million Schools FCU in Rancho Dominguez, Calif., and Stuart Perlitsh, CEO at the $355-million Glendale Area Schools FCU here, told CUToday.info that small credit unions with solid capital are not just surrendering to heavy marketplace pressures from big credit unions, such as that which they have felt from the $11.2-billion SchoolsFirst FCU, with which they have been in a dispute, but that in many cases CEOs at small CUs are throwing in the towel thanks to lucrative SERPs or limited-year contracts offered up by the acquirer.
“I am aware of some aggressive predatory credit unions that essentially see a credit union with a net worth totaling $10 million that will offer the CEO a salary contract of say $250,000 per year for three or four years if they fold,” said Perlitsh. “So the CEO takes the bait and the big credit union scoops up the $10 million.”"
“The merged CUs’ CEOs love it—they get some major pay to watch the grass grow for a few years,” said Perlitsh. “The board of the acquired institution might pick up a board seat, or get appointed to some ‘marketing committee’ or ‘technology committee’ with a tidy little conference travel budget. Everyone wins, except the members.”
Perlitsh wondered if members of the small credit union would vote to approve the merger if they knew the CEO and board members were getting “juiced” in the process
Read Complete Story At;
Sweetheart Financial Packages Hastening Small CUs' Demise?:
'via Blog this'
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