This commentary is by four former VSECU board chairs, M. Jerome Diamond, Kimberly B. Cheney, Wally Farnum and Robert B. Shattuck, and by former VSECU CEO Steven D. Post.
The VSECU board of directors claims to have spent a lot of time in executive sessions evaluating the New England Federal Credit Union merger, engaging with New England FCU directors and determining how “remarkably aligned” the two institutions are.
Based on excerpts from board minutes (which we were very reluctantly provided), those statements appear to be brazenly false.
We know that the two CEOs started their merger discussion in October. Now, we also know that after three executive sessions lasting a total of 131 minutes, the board executed a letter of intent to merge with New England FCU. We know that Rob Miller was the only person to meet with the board during those 131 minutes of discussion and that there is no evidence the board sought any outside input. Instead, what the record shows is that, in slightly over two hours, the board decided this specific proposed merger was in the best interest of VSECU members.
We know, too, that in January and February, four more board meetings were held with a total of four hours of executive session. The directors spent one hour with the NEFCU CEO, who certainly was eager to take over VSECU for free. The minutes also show the VSECU’s chief financial officer attended two executive sessions. The directors did not consult with any other members of the senior management team.
Furthermore, the minutes do not show any proof of consultation with any New England FCU board members or any independent industry professionals. Yet, the directors went to the last executive session prepared to “unanimously and enthusiastically” sign the merger agreement that would result in the surrender of VSECU’s independence, identity, members and assets.
How can the directors still claim they performed their fiduciary duty to the members they were elected to serve? All the information we have makes it clear the CEO intentionally kept most of his senior team away from the board and singlehandedly convinced the board to merge with New England FCU.
We’re only revealing what the official minutes show.
That truth is, in less than seven hours, our board of directors voted to put an end to the 75-year life of the Vermont State Employees Credit Union. Doesn’t this alone explain why four former board chairs and its former CEO believe VSECU members should reject this merger, keep our credit union and find new leadership?
We’ve been trying to make up for this fiduciary failure. We’ve been trying to get answers to many tough questions instead of just listening to the sales pitch we are being given. We’ve asked for a full and complete copy of the merger agreement; that request was denied. We’ve asked for copies of the CEO’s employment agreement and details of his supplemental executive retirement plan; those too, have been withheld.
Those documents would help us learn how CEO Rob Miller’s total reportable compensation today compares to the $407,361 he received in 2020 (based on IRS 990 tax returns) and what it will be as chief operating officer and president of New England FCU. Those documents would help us learn what happens to Rob Miller’s $3 million supplemental executive retirement plan the board gave him in 2020 (again, based on IRS 990 tax returns).
We would like to know if the terms of the retirement plan include a full payout in the event of a merger. If that’s the case, it might explain why the CEO has spent so much time these past two years trying to merge VSECU with any credit union, whether in-state or out-of-state.
We’ve asked questions that members have a right to know before voting on this proposed merger. Yet, all we get is: Trust us; bigger will be better.
If trust in leadership is a reason for us to give away our credit union, how can we trust what we hear when it is disproved by official records? How do we trust when material information is being withheld, preventing the disclosure of important financial arrangements?
We’re being told that this is a merger of opportunity. We agree it is an opportunity for someone — just not for the members. This merger does not provide any material benefit to VSECU members and distracts VSECU from serving its members and being dedicated to being the credit union built by Vermonters for Vermonters.
To bring this proposal to an end as early as possible, we have initiated a VSECU member petition. With the signatures of 1% of the membership, or about 750 members, we can demand our own special meeting and call for a vote on a resolution requiring the board of directors withdraw from the merger agreement. Members can view and sign the petition at callingallmembers.org. If the petition is successful, all eligible members will be given the opportunity to vote on the resolution to withdraw from the merger, either by paper or electronic ballot.
Let’s keep our credit union and find new leadership. Visit callingallmembers.org and sign our petition to help save VSECU.
Read the story on VTDigger here: Ex-VSECU leaders: Less than seven hours to give away 75 years. Reject the merger.