This commentary is by Spencer Newman, chair of the VSECU board of directors.
I write this in response to an opinion piece “Save VSECU” written by M. Jerome Diamond, Kimberly B. Cheney, Wally Farnum, Robert B. Shattuck and Steven D. Post, published June 17 by VTDigger.
VSECU is proposing a merger with New England Federal Credit Union, another Vermont-based credit union. Our members will vote on this proposed merger later this year. Until then, we are sharing information through an educational and regulatory process so that members have all the information to make an informed and confident decision that will be to their benefit as we move forward as a Vermont-based credit union.
The opinion piece I am responding to was written by a former VSECU CEO and former board leadership who are utilizing media to amplify their opposition and influence others to vote against the merger.
I honor the voices of our members, respect that not everyone is going to agree with this change, and understand the importance of allowing space for people to express their opinions.
I also believe in the truth. The personal attacks on our board and CEO are hostile and designed to distract and create confusion, fear and distrust. Much of the information being shared has mischaracterized the motives and process of the merger.
Misleading statements being made include:
- The board took only seven hours to make this decision.
This is misleading and inaccurate. The board of directors is a group of democratically elected volunteers who understand the enormous responsibility, attention and engagement it takes to understand, oversee and govern the multitude of complexities operating a $1 billion financial institution and safeguarding 71,000 lives.
The board has been deeply involved and active in strategic growth discussions for months. To imply that they spent only seven hours in executive session planning for and discussing this merger is completely inaccurate and fails to consider the preparation and analysis of members in advance of and following the meetings.
- The CEO has a personal agenda and hand-picked the board to achieve his agenda.
Members of the board are nominated through the same process that predates the current CEO. And in the end, the members of VSECU vote for their board of directors through an annual membership election.
- The CEO will be compensated for the merger with a large payout.
There is no additional salary or benefit granted to the CEO as part of the merger. He will retain his employment and current salary, as will all VSECU employees. The fabricated narrative that there is personal gain to the CEO is false.
Concerning the CEO’s compensation, the board hires a third party to make sure it is in alignment with salary ranges of peer credit unions of similar asset size. Working with another third party, the board also established a supplemental executive retirement plan for the current CEO in 2020, again, consistent with industry standards and peer credit unions.
This plan does not provide a large payout to the CEO. Rather, it is funded by a life insurance contract where both the CEO and VSECU receive benefits over time.
Perhaps most important, it is not tied to the merger. There are no accelerated benefits to the plan under the merger agreement. To the contrary, the CEO agreed to amend his supplemental executive retirement plan to eliminate his right to receive accelerated vesting upon a change in control, such as a merger.
Much has changed in the banking industry over the past decade. There has been dramatic change in just the last two years alone. The board’s job is to safeguard your membership and finances and continue to work on improving the lives of Vermonters by building strong, prosperous communities.
Be comforted knowing that this proposed merger is about being better at serving you while maintaining our credit union values and preserving our cooperative. We are excited that this merger will bring two amazing Vermont companies together and believe that we can create greatness for our members.
And once again, all our members will have a vote and a voice later this year. I believe this merger will keep the values of the past and take our member-driven cooperative forward in a very exciting and positive way. I encourage you to get the facts by visiting our website at vsecu.com/merger.
Read the story on VTDigger here: Spencer Newman: The truth is we’re safeguarding our members at VSECU.