Bankoh CEO cashes in stock worth $30 million
By Deborah Adamson
Advertiser Staff Writer
After going two years without a paycheck, Michael O'Neill, the chairman and chief executive of Bank of Hawaii, cashed in last week, selling 22 percent of his stock in the bank for about $30 million.
According to filings with the Securities and Exchange Commission yesterday, O'Neill sold or gave away about 800,000 shares, dropping his holdings in the bank to 2.73 million shares, or 5 percent of all shares, down from 6.9 percent.
O'Neill
O'Neill hasn't gotten a salary or bonus in the past two years and won't get a wage this year, a bank spokesman said. Instead, the bank executive has thrown his lot in with shareholders, gambling that as the bank operations turned around, he would profit.
"His payday has come," said Michael McMahon, an analyst at Sandler O'Neill & Partners in San Francisco. "He hasn't taken a salary and I think it's about time."
O'Neill said in a statement he took the step "to diversify my portfolio and (selling the stock) is not based on an evaluation of the company's future prospects."
Still, investors reacted negatively, sending Bank of Hawaii shares down 2.4 percent to $41.70 yesterday.
"In most cases, when a CEO sells a chunk of stock, it normally raises some eyebrows," said Brett Rabatin, an analyst at Midwest Research in Nashville. "But since he owns a lot of stock, it's not a huge issue."
O'Neill purchased 714,000 shares with $10 million of his own money after he joined the company three years ago. By divesting those shares and cashing in stock options last week, when Bank of Hawaii stock neared its all-time high, O'Neill had a gain of about $20 million.
Analysts said he earned it.
"He's worked extremely hard," McMahon said. "(Management has) generated tremendous value for shareholders."
Rabatin said Bank of Hawaii has "one of the best regional (bank) management teams in the U.S."
Over the past three years, O'Neill and his management team restructured the bank by divesting of under performing operations and focusing on the Hawai'i market to improve earnings and efficiency.
The bank's stock was trading for about $11 a share when O'Neill joined in late 2000. It hit a record $47.45 this past March.
The bank has said for the next three years it will be fine tuning operations because the major overhaul is finished. As such, it's not surprising that O'Neill has chosen to take a profit at this time.
On May 6, O'Neill sold 644,069 shares at an average price of $44.26 to Bank of Hawaii. The bank has bought back nearly $1 billion of company stock from various sources since July 2001.
He also exercised 90,644 stock options, buying them at an average price of $27.12 a share. He sold 83,600 of these shares on the open market at an average price of $43.41 a share, for a gain of about $1.3 million.
In addition, O'Neill donated 70,000 shares to an unnamed charity.
Separately, Bank of Hawaii said yesterday that it gave Al Landon, president and chief financial officer, 35,000 restricted shares. He will get them over four years starting on March 31, 2005. He also was granted 40,000 shares to be distributed over a five-year period, if performance goals are met.
O'Neill has never been given shares outright, the bank said.
Reach Deborah Adamson at dadamson@honoluluadvertiser.com or 525-8088.
