APPLE VALLEY, Minn.–Documents filed with NCUA related to the merger of two large credit unions reveal additional details around the proposed pay packages—including $7 million to one CEO and millions more to other executives—as well as proposed pay increases for board members. A member comment filed on NCUA’s website called the compensation “outrageous.”
As the CU Daily first reported here, the $9.39-billion Wings Financial Credit Union in Minnesota has asked its 381,000 members to vote on a merger with the $9.71-billion Ent Credit Union in Colorado Springs, Colo., which has approximately 582,000 members.
The two credit unions, which are approximately 1,000 miles apart. They are the largest credit unions in their respective states.
Members of Wings Financial are being asked to vote by Dec. 4 and are being offered a single sweepstakes prize of $5,000 for doing so. There is to be no other distribution of net worth, according to Wings’ merger disclosure statement.
The ‘Benefits’
In its statement to members, Wings Financial said that it and Ent are “unified by our aviation backgrounds, purpose, values and our strong member-first cultures.
Listed under “anticipated benefits” of the merger are:
- Personalized experiences
- Financial wellness
- Enhanced products and services, including “Deposits that work harder for our members,” “Lending that understands real life,” “An enhanced wealth journey,” “Mortgages that move our members,” and “Powering local business with heart and strategy.”
- Enhanced scale and efficiency
Merger-Related Compensation
According to the documents filed with NCUA, if the merger is approved, executives with Wings who are to receive merger-related compensation include:
- President and CEO Frank Weidner. Weidner’s role will be eliminated in the merger, according to Wings, but he will remain employed for one year in an advisory role at his current compensation. He is also to receive a change in control payment of $6.964 million, which it said is three times his annual base salary, plus target incentives.
- SVP/CAO and General Counsel Greg Higgins. Higgins will receive a base salary increase of $299,766 and on the first day of the merger, if still employed, will receive a one-time bonus of $175,000. To incentivize Higgins to remain with the credit union through the three years of expected integration, he will be eligible to receive a retention bonus of three times his annual compensation if he remains employed for the three years.
- SVP-Chief Member Experience Officer John Wagner. On the first day of the merger, if still employed, Wagner is to receive a one-time bonus of $195,000. “As part of the transition, Mr. Wagner will be stepping down from his role with the credit union and, under a board-approved change in control agreement entered into in 2020, he will receive a payment of $1.427,235 which is two times his annual base salary, plus target incentives.
- SVP-Chief Lending Officer Norm Creveling. Creveling is to receive a base salary increase of $343,572 “due to the increase in the scope and complexity of his role in the continuing credit union and in recognition of the termination of the long-term incentive plan that Mr. Creveling had as an officer with Wings,” the credit union said. If employed on the first day of the merger Creveling is to receive a one-time bonus of $175,000, and if he remains with the credit union for the expected three years of integration, he will also be eligible for a retention bonus of three times his annual compensation if he remains employed at the end of that term, Wings said.
- SVP-Chief Digital and Technology Officer/CIO Song Hou. Hou is to receive a base salary increase of $111,508 and if employed on the first day of the merger is to receive a one-time bonus of $170,000. If Hou is employed at the end of the expected three-year integration, he is to be paid a retention bonus of three times his annual compensation.
Increases for Board Members
According to the disclosure forms provided on the NCUA website, the retained Wings Financial board members will continue to be eligible for and receive compensation under an existing board compensation policy. Wings Financial said Ent CU has a higher compensation structure for its board and, as a result, WFCU will receive adjustments. Those adjustments include:
- Chair Greg Miller, who will receive $2,500 more per month (the documents do not indicate what the current compensation is)
- Board members Cheryl Minks, Geoff Heck, Elizabeth Caven, Drew Boeke, and Ben Humphrey, who will receive $1,833.33 more per month.
Board members could also be eligible for an additional $5,000 per year in compensation if selected as a committee chair at the continuing credit union, Wings Financial said.
No Member Payout; Prize of $5,000 Offered
As the CU Daily reported earlier, there will be no payout to members from net worth. Instead, Wings Financial is running a sweepstakes offering a $5,000 prize for one member whose name is selected.
Wings Financial reported $63.63 million in net income during the first three quarters, with net worth of 12.28%. Over the same time period, Ent CU had $40.4 million in net income and posted net worth of 11.14%.
Member Feedback
There are three comments filed on the NCUA website:
- “Proposed merger increasing administration salaries is “outrageous”! This merger proposal is only offering a one-time $ 5,000 reward to a member for voting! Wings Financial merger proposal appears to be only benefitting administration salaries and will try to “supersede” Minnesota Law that “pays an hourly rate” in order for merger to pass. Appears “Wings” Financial Board Members “should not” enter merger until a more reasonable/assured merger can be obtained to the benefit all members of Wings Financial!!”
- “Retention bonus payments and the change of control payment are not warranted. Sound decisions for the credit union are expected with current income levels and are equally expected in the merged entity. Commensurate income adjustments should only come with increased responsibilities in the new organization. Persons leaving the new organization should only receive what is in the employment contracts in effect before the merger.”
- “They shouldn’t merge. That would be bad if they merge.”
The CU Daily will have additional coverage of other credit union merger proposals this week.
