Bankoh CEO chimes
in on CPB’s ArnoldusMove over, Walter Dods. You've got company.
Bank of Hawaii Chief Executive Officer Michael O'Neill took his turn yesterday slamming Central Pacific Bank's Clint Arnoldus over "misrepresentations" O'Neill said Arnoldus made about Bankoh last week during a CPB Inc. conference call.
Arnoldus, already in hot water with First Hawaiian Bank's Dods over references made about that bank's French ownership, this time was on the receiving end of an O'Neill zinger at Bank of Hawaii's annual shareholders meeting. The impetus for O'Neill's attack was Arnoldus' comment that Bank of Hawaii "has taken a strategy of loading the senior management with mainland imports and in the process ... alienated the market."
O'Neill, who has declined comment on CPB's hostile merger offer for City Bank parent CB Bancshares Inc., said he objected to Arnoldus' contention that Bank of Hawaii was mainland managed and that the bank had broad customer dissatisfaction.
In fact he had a career suggestion.
"If things don't work out for Mr. Arnoldus, I understand Iraq is looking for a new minister of finance," O'Neill said to a roar of approval.
A week earlier, during the same conference call, Arnoldus implied Bank of Hawaii and First Hawaiian Bank weren't "local" enough. That drew the ire of Dods, the chairman and CEO of First Hawaiian.
"If he really understood what 'local' means, he'd know local people don't make hostile attacks on honorable competitors," Dods said. "Anytime he wants to debate in pidgin on 'local,' I'm available."
Arnoldus, reached in Boston yesterday during the final leg of an East Coast trip designed to drum up merger support, reiterated he didn't mean to offend anyone.
"It's just two different styles," Arnoldus said. "Our philosophy is to build this bank from within the state and theirs is looking outside Hawaii for key management positions. I certainly respect Mike's team very much. He's certainly got smart people working for him."
Arnoldus also expressed a desire to see the end of the verbal jousting on this issue. "It's not healthy for us to start slinging mud back and forth," he said.
Nearly lost in the competitive antics was O'Neill's revelation earlier in the Bankoh shareholders' meeting that he has decided for the second year in a row to refrain from taking a salary and bonus. That figure amounts to between $1.5 million and $2 million, O'Neill said.
"Unfortunately, in some companies, there's a tradition of pain occurring rather low in the organization without much pain occurring at the top," he said. "I felt it was important and our management felt it was important that we make a contribution, that we establish the fact that we, too, would sacrifice."
Instead, O'Neill is taking options in lieu of cash and tying his personal earnings into the bank's stock performance.
"Our banking committee was pretty happy about that," he said.
O'Neill also said the bank's management committee, whose members give up 10 percent of their salary and 100 percent of their cash bonuses last year in lieu of options, will return to regular levels this year. Some managers, however, have opted to retain the cash and options combination, he said.
O'Neill is forgoing his salary and bonus again because he said the bank's performance is still not at the level he desires. One major reason for the drag on earnings, he said, is the company's excess cash -- earning a 2 percent return -- that is the result of the bank's numerous divestitures.
Meanwhile, O'Neill said Arnoldus's comment that Bank of Hawaii was mainland run was not just a misrepresentation but also implied that it was a "bad thing." O'Neill said it also was untrue that "customers were leaving us in droves because of this harsh and unfeeling attitude of these mainland managers."
Arnoldus denied saying customers were leaving Bank of Hawaii in droves. However, a text of his conference call shows that Arnoldus said Bank of Hawaii had alienated the market and "sent the direct message to the market that mainland people are the people that should be running this institution, not the people of Hawaii. That hasn't been received very well."
Thus, with Arnoldus' comments as fuel at the shareholders meeting, O'Neill began introducing many of the bank's Hawaiian-born executives and inventing bogus birthplaces for them. He introduced Peter Ho as being from Duluth, Minn., and Peter's grandfather, Chinn Ho, as being a long-term resident of Duluth. In actuality, the elder Ho, who died in 1987, was a local financier and developer.
O'Neill then introduced Donna Tanoue, who runs the bank's investment management and trust business, as being from St. Louis. Tanoue, the former chairwoman of the Federal Deposit Insurance Corp., actually graduated from Kalani High School and the University of Hawaii. O'Neill continued the routine for several more executives.
"The point I'm trying to make here is we have local people here doing very critical jobs," he said. "Did we bring in people from the mainland? We did. ... We brought people in with strong administrative skills and a strong knowledge of banking. Happily, those skills are transferred."
Bank of Hawaii
First Hawaiian Bank
Central Pacific Bank
City Bank