- Reaction score
- 1,184
- Points
- 1,060
Investors angry at former CIBC executive Hunkin
http://www.ctv.ca/servlet/ArticleNews/story/CTVNews/1123185363997_1/?hub=Canada
CTV.ca News Staff
Updated: Thu. Aug. 4 2005 11:27 PM ET
CIBC shares continued their nose-dive Thursday in the wake of the bank's $2.4 billion payment to clear itself of the Enron affair.
The share price has fallen about 11 per cent since Tuesday, closing Thurday at $71.75. Days earlier, it was at the 52-week high of $81.20.
And while the share price takes a beating, some investors want to lay a legal one on the bank's former CEO, John Hunkin.
"Normally you get bonuses when you add to shareholder wealth. It's hard to say the bank created wealth when it just paid $2.4 billion," said Lex Kerkovius, a portfolio manager with McLean and Partners Wealth Management in Calgary.
"I think there's a definite question mark (on whether) the compensation is justified."
The huge payout came to settle a lawsuit which accused CIBC and other banks of helping the one-time energy trading giant to commit fraud.
Hunkin led CIBC during many of those years. Since 1999, he was paid $15 million in salaries and bonuses -- and pocketed $52 million in stock and other securities when he retired last Friday.
Some groups, like the Winnipeg-based Investors Group, plan to ask the bank's management whether it intends to claw back some of that compensation.
CTV News tried to speak to Hunkin at his cottage, located in the resort town of Chester, Nova Scotia. But he wouldn't return phone calls, and his wife said he wasn't around.
But he was around his summer home, and took time to do some yachting.
Some folks in Chester were stunned to hear of the bonus money paid to Hunkin -- and some thought he should pay some of it back, given the drubbing the bank took to settle the lawsuit.
An accounting professor suggested Hunkin should do the right thing and return some of his bonus money to shareholders.
"Its nice that's he's sitting in the house they funded. But he should be accountable: He's accountable for successes and he's accountable for screw ups," said Ramy Elitzur of the Rotman School of Management in Toronto.
"This is one of those cases. I think lots of people are going to be very, very angry."
Economist's gaffe
Meanwhile, the chief economist of CIBC World Markets has been sent to sensitivity training after angering a prominent Islamic lobby group in Canada.
In an April report, Jeff Rubin predicted oil prices would double by 2010. He wrote that demand will outstrip supply in the future because "there won't be any tap that some appeased mullah or sheik can suddenly turn back on."
Rubin was making reference to OPEC's affect on oil prices in years past. But his language offended the Canadian Council on American-Islamic Relations (CAIR-CAN).
The organization wrote the bank saying it was "gravely concerned that Mr. Rubin is promoting stereotyping of Muslims and Arabs."
CIBC World Markets chief executive Brian Shaw wrote a response to CAIR-CAN. He said the remarks "were not meant to offend anyone" but said that "in hindsight, the comments were insensitive."
Shaw said the bank would provide [Mr. Rubin] with training "to ensure that this situation does not occur again in the future."
CAIR-CAN has posted the text of the exchange with Shaw on its website and urged its supporters to thank CIBC for excising the mentions of mullahs and sheiks.
Rubin's revised forecast now concludes that "this time around, with suppliers already running full tilt, there's no tap that can suddenly be turned back on."
With a report from CTV's John Vennavally-Rao
© Copyright 2002-2006 Bell Globemedia Inc.
Reproduced under the fair dealing and fair comment provisions of the Copyright Act.
http://www.ctv.ca/servlet/ArticleNews/story/CTVNews/1123185363997_1/?hub=Canada
CTV.ca News Staff
Updated: Thu. Aug. 4 2005 11:27 PM ET
CIBC shares continued their nose-dive Thursday in the wake of the bank's $2.4 billion payment to clear itself of the Enron affair.
The share price has fallen about 11 per cent since Tuesday, closing Thurday at $71.75. Days earlier, it was at the 52-week high of $81.20.
And while the share price takes a beating, some investors want to lay a legal one on the bank's former CEO, John Hunkin.
"Normally you get bonuses when you add to shareholder wealth. It's hard to say the bank created wealth when it just paid $2.4 billion," said Lex Kerkovius, a portfolio manager with McLean and Partners Wealth Management in Calgary.
"I think there's a definite question mark (on whether) the compensation is justified."
The huge payout came to settle a lawsuit which accused CIBC and other banks of helping the one-time energy trading giant to commit fraud.
Hunkin led CIBC during many of those years. Since 1999, he was paid $15 million in salaries and bonuses -- and pocketed $52 million in stock and other securities when he retired last Friday.
Some groups, like the Winnipeg-based Investors Group, plan to ask the bank's management whether it intends to claw back some of that compensation.
CTV News tried to speak to Hunkin at his cottage, located in the resort town of Chester, Nova Scotia. But he wouldn't return phone calls, and his wife said he wasn't around.
But he was around his summer home, and took time to do some yachting.
Some folks in Chester were stunned to hear of the bonus money paid to Hunkin -- and some thought he should pay some of it back, given the drubbing the bank took to settle the lawsuit.
An accounting professor suggested Hunkin should do the right thing and return some of his bonus money to shareholders.
"Its nice that's he's sitting in the house they funded. But he should be accountable: He's accountable for successes and he's accountable for screw ups," said Ramy Elitzur of the Rotman School of Management in Toronto.
"This is one of those cases. I think lots of people are going to be very, very angry."
Economist's gaffe
Meanwhile, the chief economist of CIBC World Markets has been sent to sensitivity training after angering a prominent Islamic lobby group in Canada.
In an April report, Jeff Rubin predicted oil prices would double by 2010. He wrote that demand will outstrip supply in the future because "there won't be any tap that some appeased mullah or sheik can suddenly turn back on."
Rubin was making reference to OPEC's affect on oil prices in years past. But his language offended the Canadian Council on American-Islamic Relations (CAIR-CAN).
The organization wrote the bank saying it was "gravely concerned that Mr. Rubin is promoting stereotyping of Muslims and Arabs."
CIBC World Markets chief executive Brian Shaw wrote a response to CAIR-CAN. He said the remarks "were not meant to offend anyone" but said that "in hindsight, the comments were insensitive."
Shaw said the bank would provide [Mr. Rubin] with training "to ensure that this situation does not occur again in the future."
CAIR-CAN has posted the text of the exchange with Shaw on its website and urged its supporters to thank CIBC for excising the mentions of mullahs and sheiks.
Rubin's revised forecast now concludes that "this time around, with suppliers already running full tilt, there's no tap that can suddenly be turned back on."
With a report from CTV's John Vennavally-Rao
© Copyright 2002-2006 Bell Globemedia Inc.
Reproduced under the fair dealing and fair comment provisions of the Copyright Act.
So now, I am in the process of trying to select a new bank.. what a hassle! I totally understand why my great aunt keeps her money buried in the back yard! ;D
