Excessive Insider Compensation Charged AtConvert CU
CRANFORD, N.J. - (02/06/06) A group of banking speculatorsagitating for a bigger payout at ex-credit union Synergy Financialnamed two nominees for the savings banks board last week,part of an escalating proxy battle. If elected, the two nomineeswill push the board to pursue strategies to enhance shareholdervalue, including paying down some of the former creditunions $95 million in capital to finance more stockbuybacks, according to John Lashley, whose investment partnershipPL Capital has amassed a 9.9% stake in the bank. Lashley, whosefirm has become Synergy Financials largest shareholder, saidthey believe the management and board have overpaid themselves fromcompany coffers and should be more generous with the rest of theshareholders. Now that they got paid its time to takecare of the shareholders, Lashley told The Credit UnionJournal, of more than $14 million in stock and cash benefits paidto top managers and directors since the credit union-convert wentpublic three years ago. Proxy materials filed with the Securitiesand Exchange Commission show that Synergy Financial CEO John Fiore,who engineered the 1999 conversion from credit union, was paidalmost $4 million in compensation since then and has compiled anownership stake of almost $3 million in stock, including $1.6million in stock grants the last two years. Two other long-timedirectors, Nancy Davis and Kenneth Kaspar, who helped convertSynergy FCU to a mutual then stock-owned institution, have amassedstock worth more than $800,000 during that time. Each of the formervolunteer credit union directors also receives $25,000 in annualboard fees. Synergy Financial filed proxy materials with the SECFriday calling on shareholders to support the three incumbentsrunning for reelection to the board, including Fiore, Davis andPhil Scott, and to reject the PL Capital overtures.