The SAFE Credit Union Merger: I Don't Get The Connection?

                                  Back again from the West Coast...!

Know many of you are frustrated - and bored! - by those repeated ventures west to review what's going on with the SAFE/Boeing CU merger. 

✔ Why bother? What does it have to do with the governance and elections at SECU? Probably a lot!

Not sure what else can be said about the sellout under way at SAFE CU - a thriving, financially sound, $4.4 billion community asset in Sacramento. The merger agreement can not be reasonably justified on an economic, financial, nor business basis. 

250,000 SAFE members are being asked to give up their locally-owned, locally-controlled institution - with a market value of between $400 million to $800 million! [link] - for little measurable gain.  SAFE members lose out, while Board and senior leaders cash out. [link] 😎 Can't happen here? 

That's where WakeMed comes in.  A thriving, financially sound, multi-billion community asset located in Raleigh.  Over 1 million citizens of Wake County are being asked to give up their locally-owned, locally-controlled institution [link] - with a market value of well over $1 billion! [link] - for little measurable gain. Wake citizens lose out, while the Board and senior leaders have checked out! 😎 It already has happened here!

Over 100 citizens lined up last week to speak against the WakeMed giveaway, criticizing the potential for rising costs, waning care for those of modest means, lost of local control, and the lack of transparency by the hospital board and senior management. One speaker expressed the obvious: "You're going to aggregate another monopoly in our local market and our people are going to pay more for it."

WakeMed thought it could run this raw deal under the radar as a consent agenda item, without ever engaging the citizens of Wake County in a discussion of the merits of the proposal. Many feel that neglect of transparency was because a good case can't be made for a bad deal. It may be too late for Board credibility, regardless of any merit. 

The SAFE Credit Union Board and senior management have made the same mistakes ... they have put their fellow citizens and community in play.

✔ For SAFE: Is it a governance mistake of omission or commission - or both ? 

  What about SECU? Stay tuned... 

 

The SAFE/Boeing Mega-Me Merger: "Show Me The Money"?

   

✅ Faye Nabhani, soon to be former CEO of SAFE Credit Union one way or the other,  authored the letter to SAFE members strongly supporting the merger and asking member support. (See the full text of her letter: [here!])

✔ As the disclosures in her letter reveal in #'s 2, 3, 4 below, Ms. Nabhani will benefit by at least $4,358,000 from the merger. Lots of folks will probably "get exercised" about a $4.3 million payout by their folksy, community-minded, non-profit, cooperative.  

Maybe they should or, of course, it could also just be envy and jealousy - y'know that human nature thing! 

1. "Ms. Nabhani’s SERP and change-in-control agreement were established prior to, and independent of, the proposed merger. Because BECU does not offer an equivalent program, Ms. Nabhani’s existing agreements will be terminated, and its value will be paid out as a retention agreement tied to continued employment through the post-merger transition period."
2. "For the SERP portion of the agreement, Ms. Nabhani will be eligible for three separate post-close payments up to $1,075,000 each (totaling up to $3,225,000)." 
3. "For the Retention portion of the agreement, Ms. Nabhani will be eligible for three separate post-close payments up to$361,000 each (totaling up to $1,083,000)." 
4. "A one-time $50,000 bonus, as described above."
5. "Separately, upon closing of the proposed merger, Ms. Nabhani has agreed closer to be employed by the Continuing Credit Union in the position of Market President for the Greater Sacramento Region. Upon employment by BECU after closing, Ms. Nabhani’s total future annual compensation, including base salary, incentive opportunities, and employer retirement contributions, is expected to decrease by approximately $504,710."

 ✔ But while you recover from that fit of jealousy and envy, please consider two other points. 

• First, regardless of what the Board and Ms. Nabhani claim about everything remaining the same ("We can build on all that SAFE has stood for over the past 85 years."); there will be a change-in-control at SAFE [see #1] - no if's, and's, or but's. SAFE will no longer belong to the Sacramento community - period! 
•  Second, in reading #5, you might get the impression that Ms. Nabhani is making a huge sacrifice in this merger with her compensation decreasing by @ $504,710! Trick question: "What is her new, "low" compensation?" (According to IRS filings @$750,000 annually!)

😎 So. if Ms. Nabhani stays 1 year, she will take home over $5+million, 3 years over $6.5+ million, 5 years over $8+ million.... "As a member-owned credit union, everything we do is guided by one simple commitment: doing what is best for you. 

😎 Two SAFE Board members are accepting seats on the BECU board and will be each paid $125,000 per year. 

✔  "Thank you for the trust you place in SAFE Credit Union." 

  "People Helping People"... some perhaps more than others?