Bank of America’s gift to former MBNA CEO…
Late Friday, Bank of America (BAC) filed its 10K and while there were lots of interesting things in the filing, the thing that jumped out at me was this agreement with former MBNA CEO Bruce Hammonds.
Hammonds, whose retirement from Bank of America was announced in December, received $6.8 million from BofA in January, according to the agreement. He joined Bank of America following the $35 billion merger two years ago.
But here’s where it starts to get really interesting. While Friday’s agreement is described as a replacement for a retention agreement that Hammonds signed back on Sept. 6, 2005, a scan of filings for both BofA and MBNA doesn’t turn up the agreement. There is a mention of Hammonds’ retention agreement in this S-4 that Bank of America filed on 9/19/2005, but the actual agreement appears to be MIA. In the S-4, the value of Hammonds’ agreement, which includes access to the corporate jet for 7 years post-merger, is estimated at $22.7 million. One other interesting thing about the agreement: it was dated June 19, 2008, but wasn’t included until the K filed on Friday.
Now, maybe Bank of America is getting a bargain with this new agreement. But if they are, why do they seem to be taking the extra effort to bury the details? It’s impossible to tell from Bank of America’s filings how much — if any — of that $22.7 million has already been paid. And without that, it just looks like another TARP beneficiary — and a deeply troubled one at that — giving another generous goodbye gift to another top executive.
For more details on some other TARP beneficiaries, here’s a story I did for Portfolio.
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Posted in Tags: 10Ks, CEOs, TARP |
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March 2nd, 2009 at 11:23 am
“access to the corporate jet for 7 years post-merger, is estimated at $22.7 million”
Nice catch. Can only imagine what else is buried in the
devil’s details. But imagination, like hope & uncertainty,
does not lead to a trading plan. Thanks BAC.
March 3rd, 2009 at 12:50 am
Wow, very nice to see that someone out there is scouring and revealing some of the horrible mismanagement of our public money. I am sure with TARP that such gifts are painfully all too common.
Great site!! Look forward to continue reading your articles!
March 3rd, 2009 at 8:41 am
Maurice “Hank” Greenberg, 83, claimed in papers filed in federal court in Manhattan Monday that the company, once the world’s largest insurer, has ruined his fortune by lying about its financial health.
Will Bank of America executives follow “suite”?
Merrill?
Lehman?
BearStearns?
March 4th, 2009 at 9:12 pm
How is this possible, without being an actual violation of SEC regulations? Are companies allowed, routinely, to get away with referencing documents never actually filed publicly?
March 4th, 2009 at 9:43 pm
@rfall: Not quite sure. Perhaps it wasn’t deemed to be material, though that seems hard to believe given that Hammonds was CEO. I not only searched for retention agreement, but also all agreements/exhibits where Hammonds’ name was mentioned and came up with nothing. Bottom line: there could be a plausible reason here, but I’m not coming up with any.
March 6th, 2009 at 11:46 am
Theres no incentive for any of these guys to do a good job. Failure is pretty lucrative.
March 7th, 2009 at 9:35 am
Bailout 2008, a poem by David Jeffrey:
Like a bloodied warrior,
laying broken and torn.
Like a dying soldier, hopeless and forlorn.
But the blood, it be green,
the color of money.
And the soldier is an economy,
and it is anything but funny.
Broken are it’s people and shattered are their dreams.
Thanks to the ultra rich and their full proof schemes.
It is a tragedy with more pain to come.
Finance will be Hell, and their wills will be done.
http://www.voicesnet.org/allpoemsoneauthor.aspx?memberid=982900010
March 8th, 2009 at 12:31 pm
I noticed that Louis J. Freeh is listed as Vice-Chairman of MBNA. Here is a qoute from Judge Freeh’s Wikipedia bio. “Freeh began his career as an agent of the FBI, and was later an assistant United States Attorney and a United States district court judge, the position he held when appointed FBI director. He is now a lawyer and consultant in the private sector.” I think that Judge Freeh’s background more than qualifies him to be able to point out a discrepancy like this to MBNA. Makes me wonder why it has never been fixed, especially since he signed the document along with Mr. Hammond.