The Conversion "Experts"
There is a small industry of consultants and attorneys who have
facilitated most credit union to bank conversions.
In many cases, these experts approached credit union management and proposed the conversion
plan. Here are some of the arguments for conversion from an article by Alan
Theriault, a leading conversion consultant, titled "Why Convert? Director &
Executive Compensation,":
"It really was a no-brainer. You had all this money sitting there
without anyone's name on it."3
-Conversion Specialist Bert Ely, Ely & Company Inc.
http://www.ely-co.com/
"Across all peer groups, salary surveys report that credit union CEOs are
paid much less cash compensation than Bank CEOs… Credit union directors are
unpaid, while bank directors may earn from $2,500 per year to over $50,000, plus
the travel and expense allowances… As a stock bank ... management, including
directors, get to be compensated like bankers and executives from other
industries.
The reward for performance could lead to a $10 million plus ownership stake for a
capable CEO. If the conversion is not made during the current tenure, the next
CEO in charge may very well realize the value."1
Theriault explains that, "Switching charters is a common practice among
financial institutions as their mix of business or goals change."
2 Does he mean changing goals from benefiting members to enriching
insiders?
Read Alan Therialt's
website.
In the News:
"Consultant
Pitches Millions That Can Be Made", Credit Union Journal, 02/23/04.
"The 'Canary'
In The Credit Union Conversion Coal Mine", Credit Union Journal, 11/17/03.
