After a contentious meeting Friday, the nation's largest mutual thrift won the right to sell stock for the first time.
Green Point Savings Bank, the $6.44 billion-asset New York City thrift, held the meeting Friday in a hotel a few blocks from its headquarters in Flushing, Queens. About 700 of its depositors came to ask questions of chairman and chief executive Thomas S. Johnson before voting on whether the thrift should be allowed to sell tip to $786 million in stock.
Green Point's conversion plan was pushed into the limelight after Republic New York Corp. made a hostile takeover offer.
Depositor Scolds CEO
Agnes Henchill, an elderly depositor, scolded Mr. Johnson for strongly urging account holders to vote in favor of the stock conversion plan. Mr. Johnson and other trustees will be given 3% of the shares and stand to make several millions dollars by selling their holdings. Ms. Henchill said depositors should be able to, "put our two cents in - not only in your bank, but also to say how it is run."
Mr. Johnson fielded dozens of his customers' questions for more than an hour before the votes on the stock conversion plan were counted.
Sale Must Be Delayed
State-regulated Green Point announced that more than the required 75% of depositors had voted in favor of the plan, but refused to say what the actual vote was. In stock conversions under federal rules more than 95% of those voting usually vote in favor of the plan.
A spokeswoman for the New York State Banking Department said Green Point had five days to submit the official vote results, but that nothing prohibits the thrift from announcing the unofficial tally.
The spokeswoman said that Green Point would not be able to sell shares as planned on Dec. 15 because the department plans to hold a hearing on the conversion process. Last Monday, the regulator warned that if Green Point held the vote Friday as planned, it risked having the results thrown out if it were discovered "that the proxy statement disclosures were inadequate, that the appraisal does not conform to New York law, or that the Green Point proxy solicitation process was conducted in a manner that was unfair to the Green Point depositors."
At the meeting, several depositors complained that the compensation package Green Point's management would get as part of the stock sale was too generous, especially for Mr. Johnson. who joined Green Point in August. Others praised the thrift for escaping Republic's hostile takeover bid. The New York bank was forced by the state banking superintendent to withdraw its offer.
To Get $2 Million in Stock
Mr. Johnson will receive $2 million in Green Point stock free of charge, plus options to buy $4 million more over 10 years - amounts allowed by both federal and state banking laws, On top of that, he plans to buy $500.000 worth of the stock.
But Morris Goldzblatt, a beefy depositor wearing an orange T-shirt under his sweatsuit, said he didn't mind Mr. Johnson's compensation. He sat burping and smacking his lips on a Tootsie pop as he listened to Mr. Johnson's presentation.
Mr. Goldzblatt, who said he sells tickets to sporting events for a living and said he is a "big stock market player," told Mr. Johnson he would probably buy 20,000 shares, and asked how he could buy some for his sister. He stood at the meeting to tell the thrift CEO, "Hey, you got it coming to you as long as you do a great job."
|Issue Has Been Confused'
After the meeting, Mr. Johnson announced the thrift would set up an independent committee to review management compensation in connection with the conversion.
"The whole compensation issue has been confused by Republic," Mr. Johnson said.
Green Point predicted on Thursday that it would win the vote, and several thrift lawyers said it would have called off the vote unless it was sure of victory. The thrift's stock is likely to be oversubscribed, especially because the New York regulator has publicly said that the appraisal in the deal may be low.