Why are bank/brokerage fees so high?
I don’t know about you, but each time I turn around, it seems like my bank or credit card company or brokerage firm is implementing some new fee or upping an old one. And then, when you actually call them about it, they try to pretend that you’re paying for their superior customer service. As if!
What does this have to do with SEC filings? Well, the crop of proxies coming out from some major financial services companies provides some details on what some of those nuisance fees are paying for: perks for top executives. A quick skim of the footnotes in the proxy for Mellon Financial (MEL), whose brands include mutual fund giant Dreyfus Funds and which is in the process of merging with the Bank of New York (BK), provides a long list of perks heretofore unknown to Mellon’s investors (or customers). Highlights include $194K for Chairman and CEO Robert Kelly’s use of the corporate jet to ferry him between Pittsburgh and North Carolina, $94K on a car and driver, $66K on his country club membership and another $52K spent to provide him with financial planning services (hopefully, he used someone at his own company).
While the proxy filed by Washington Mutual (WM) doesn’t do as good of a job of breaking out the perks in detail, it does note that Chairman and CEO Kerry Killinger spent $143K on his personal use of the corporate jet. Just below that, the company notes that Killinger began reimbursing the company for his personal use as of January. Sounds like that’s potentially good news for WaMu’s customers.
Of course, not every financial services company went whole-hog. This proxy filed by Prudential (PRU) earlier today shows a pretty meager cost of perks: just $12.7K for Chairman and CEO Arthur Ryan’s home security and another $24K for a car. That’s downright frugal, compared to some of the other disclosures out there.
And now an update on Espeed (ESPD). Chap-Cap filed an amended 13-D late yesterday that included an email exchange between Chapman and one of the “lackeys” for Espeed CEO Howard Lutnick. Just goes to show you that it pays to pay attention to what you write in an email.
Advertisement
|
Posted in |
 3 Comments » |
March 22nd, 2007 at 12:12 pm
The E-Speed brouhaha is becoming a daily soap opera! Thanks for summarizing the important plot advances.
I do wish Mr. Chapman would adopt a standard set of put-downs to identify important players in the soap. Sometimes CEO Lutnick’s assistants are called “lackeys,” as you note. However, at other times they become his “gate keepers” or his “handlers.” To add to the confusion, some put-downs stand alone while others are put into parentheses. Is there a hidden message here?
I’d still put my money on Lutnick to beat Chapman. Chapman can’t seem to identify any legal irregularities in Lutnick’s performance or power consolidation, just an “unseemliness,” i.e. he doesn’t like it.
Without any legal wrong-doing to hang his hat on it comes down to who has the votes. On that point, Lutnick’s ~60 percent (?)clobbers Chapman’s 9.3 percent in the show down.
March 22nd, 2007 at 7:17 pm
To reiterate what I said previously–CHAP-CAP does not have enough clout to get it done. Name calling is too easy. A tender offer is a bit more difficult and takes deep pockets.
I like their approach but the game has changed.It is trench warfare and the FAT CATS have the advantage. They might get lucky and bring in the vultures,but it would be luck.
March 23rd, 2007 at 10:17 pm
Back on-topic: because you don’t fire them. If everyone in the world ceased doing business with any entity that overcharged for commodity products like banking and brokerage, those fees would be dead.
Check into credit unions and ultradeep-discounters.