Newsletter Highlights Deteriorating Earnings That Threaten Dividends
WILMINGTON, Del., June 10 /PRNewswire-USNewswire/ -- Despite a 40% drop in stock value and analyst concerns about company performance, top executives at Wilmington Trust (NYSE: WL), received more than $8.6 million in 2008 alone and gained over $17.1 million in pension benefits, according to a newsletter issued today. The debut issue of Wilmington Trust Exposed was distributed to 400 shareholders, market analysts, media outlets, and business leaders by 32BJ SEIU -- the largest property service workers union in the country.
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As detailed in the newsletter, Wilmington Trust's poor performance is not limited to its stock price. The company recorded an operating loss in 2008, a sharp reversal from previous years. The company's Board of Directors cut the dividend in half in January 2009, a signal that management may not be confident of a return to higher levels from just recent years.
After Wilmington Trust released its 2009 1Q earnings, Moody's cut its long-term issuer rating as well as its rating of long-term deposits of the operating bank subsidiary. The newsletter also explains that "sell" ratings were issued on the company's shares after the earnings report. Furthermore, Zacks Investment Research expects a further deterioration in credit quality due to ongoing weakness in sales, and is "concerned about the recent rating downgrades."
Wilmington Trust has received $330 million from the Treasury Department's bailout plan. The company's CEO, Ted Cecala recently called the "downside" of TARP funds "a classic bait-and-switch" and states that the company will "look to exit as soon as possible," possibly because the program places certain restrictions on executive compensation. A recent Rasmussen Reports poll finds 58 percent of investors and 64 percent of non-investors support regulating compensation at companies that receive taxpayer bailouts.
Audit Integrity, a provider of accounting and governance risk analysis on public companies found that all but 14 of the worst performing companies had excessive executive compensation. According to the analysis, executives who are delivering the worst performance were collecting the highest compensation.
With more than 110,000 members in nine states, including Delaware, 32BJ is the largest property service workers union in the country.
SOURCE SEIU Local 32BJ