Bankoh chief gives up $1.5M in salary
By Frank Cho
Advertiser Staff Writer
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| O'NEILL: Giving up a $1.5 million salary |
Based on current budget projections, O'Neill said the bank has to cut about $12 million in expenses this year to hit the financial targets it promised Wall Street before Sept. 11 and preserve its rising stock price.
O'Neill said that in this latest round of belt tightening, the bank is looking at everything from benefit programs to car allowances to executive perks to see where cuts can be made.
Another nine senior executives, all members of the bank's management committee, also agreed to give back 10 percent of their salaries and forego cash bonuses this year — saving the company another $2 million to $2.5 million.
"It does not take a genius to figure what you've got to do is you have got to cut expenses," O'Neill said.
While it is not easy to give up a million-dollar salary, O'Neill and Bankoh's senior executives won't go hungry. O'Neill, owns about 829,000 shares of bank stock he acquired when he joined the company in November 2000. Since then, O'Neill's stake has risen more than 70 percent, or $9.1 million dollars. That is six-years worth of salary and bonuses.
O'Neill also said he plans to go to the company's board of directors in March to seek approval for a plan that would give senior executives stock in place of the cash they are giving up.
"What we are trying to do is make sure senior management gave more than its fair share to set the tone for the company. We are also very keen to preserve jobs," O'Neill said. "In the aggregate, everyone in the company needs to make a contribution."
The announcement comes after Pacific Century Financial Corp., the parent of Bank of Hawaii, saw earnings grow 3.6 percent and its share price climb 53 percent last year i O'Neill's first full year in charge.
The company has been in the midst of a major restructuring over the last year in which it has divested nearly all of its overseas assets to focus its banking business on a few core markets. Federal regulators rewarded the bank's restructuring efforts and ended their increased oversight.
Yesterday's report revealed earnings were down 19.2 percent in the last three months of 2001 from the same period a year ago but still in line with lowered Wall Street expectations.
Net income for the three months ending Dec. 31 fell to $26.3 million, or 34 cent per diluted share, from $32.6 million, or 41 cents, in the same year-earlier period.
Included in the bank holding company's fourth-quarter earnings, however, were $18.5 million in adjustments and charges related to the company's restructuring and a $3.4 million loss on venture investments.
On an annual basis, Pacific Century reported earning $117.8 million, or $1.46 per diluted share, in 2001. That was up 3.6 percent from $113.7 million, or $1.42 cents, in the previous year.
"I am pleased that we were able to successfully complete the sale of our non-strategic assets," O'Neill said. "Also gratifying and significant was the lifting of the Memorandum of Understanding by our regulators."
The bank entered the memorandum in the third quarter of 2000 after regulators became concerned about asset quality problems at the bank.
The company also said its board approved a $300 million share buyback program, a move expected to help its stock price.
The company's earnings met average estimates of 35 cents a share. Pacific Century's stock rose yesterday to $26.14, up 49 cents. Trading totaled 296,900 shares.
"I think they have done a lot to reduce risk in the balance sheet going forward," said Jim Bradshaw, a banking analyst with D.A. Davidson & Co. in Portland, Ore.
Reach Frank Cho at 525-8088, or at fcho@honoluluadvertiser.com.
