Bank merger
yields payouts
Ronald Migita, the top CB Bancshares Inc. executive who once chided his Central Pacific Bank counterpart for his hostile merger tactics, will receive a separation package in excess of $3.7 million if the two institutions ultimately get married.
The biggest severance payout, though, will go to Richard Lim, president and chief operating officer of City Bank. His combined severance and retirement benefits will be nearly $11.6 million.
Their financial compensation was detailed this morning in a Central Pacific Financial Corp. filing with the Securities and Exchange Commission.
The $420 million merger, which still needs regulatory and shareholder approvals, is expected to close in the third quarter.
Clint Arnoldus, Central Pacific's chairman, president and chief executive officer, will receive a $1.08 million bonus upon completion of the merger. He and Migita both say they have settled their differences and are looking forward.
Although some financial terms of the executives' compensation were revealed earlier this week in the Star-Bulletin, today's filing offered a more complete picture.
Migita's separation package calls for him to receive a change-in-control severance benefit of about $2 million, a supplemental executive retirement lump-sum benefit of about $900,000 and an executive deferred compensation lump-sum payment of about $600,000.
He also will receive payments to cover tax liabilities from his three benefit payments as well as from the anticipated accelerated vesting of his options. Migita, who owns 56,071 shares of either stock or exercisable options, will be able to roll over 27,123 additional options -- plus any options received since March -- that will immediately become vested if the deal is approved. CB Bancshares also will make a payment of about $234,000 to a third-party insurer to fund Migita's existing life insurance policy.
Migita additionally will receive $200,000, plus director fees, as nonexecutive chairman of the merged bank.
Lim's combined payout includes $9.5 million under his supplemental executive retirement benefit. His taxes also will be covered as part of his arrangement. He also will be able to roll over 27,123 options -- plus any options received since March -- that will be vested if the deal is approved.
Lim, who owns 35,462 shares of either stock or exercisable options, will be senior vice president of mortgage banking at Central Pacific and will have a base salary of $150,000. He will have an opportunity to increase that by as much as $45,000 based on performance.
Dean Hirata, the chief financial officer of CB Bancshares who will shift to that role at Central Pacific, did not receive an immediate separation package. However, he will receive $500,000 from his 14,768 unexercisable options that will become vested upon the merger.
If Hirata decides to resign during his three-year term, he will receive a lump-sum payment of about $830,000 and 20-year monthly payments of $20,000 when he turns 65.
Among other CB Bancshares executives, Douglas Weld, executive vice president of City Bank, did not receive a separation package. However, if Weld decides to resign during his three-year term, he will receive a lump-sum payment of about $800,000 and 20-year monthly payments of $7,400 when he turns 65. His new title will be executive vice president and chief credit officer.
Warren Kunimoto, executive vice president of City Bank, will get a separation package of $672,000 along with 20-year monthly payments $11,000 when he turns 65. His new title will be senior vice president of information technology.
Lionel Tokioka, chairman of the board at CB Bancshares, will receive an annual consulting retainer of $100,000.
Besides Arnoldus' merger bonus, he will get a $600,000 base salary that could reach $1.05 million if performance targets are achieved, and he will receive 180,000 options that will vest over three years.