Regulators Slash L.I. Savings' Management Perks

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WASHINGTON -- Directors and officers at Long Island Savings Bank are expected to receive for free up to $8.9 million in stock after the mutual thrift's initial public offering, down from the $14.9 million they originally asked regulators to approve.

Not counting stock options, officers, directors and employees of the bank will wind up with just $36 million of the new stock, not the $52.7 million they had hoped to buy and be given.

The bigger numbers come from a preliminary filing on the deal that Long Island Savings filed with the Securities and Exchange Commission. The smaller numbers come from the final prospectus regulators approved for the conversion.

That is not the only change in the the filing. Chairman and Chief Executive Officer John J. Conefry, Jr. doubled his salary to $600,000 in the time it took to print up the final prospectus on Valentine's Day.

Career Moves

Last September, Mr. Conefry was a director and vice chairman at the thrift, two months later he was elected CEO, and in January, Mr. Conefry also became chairman of the board.

A December filing with the Securities and Exchange Commission lists Mr. Conefry's salary at $300,000. By the February prospectus, his annual salary had grown to $600,000.

Long Island Savings refused to comment on the salary increase.

The thrift is expected to issue $298 million in stock. It will use part of the proceeds to bring its 5.2% capital level up to a healthy 8%. The rest of the proceeds will go to a new holding company being formed in the transaction. The money to fun0d the holding company can be used for various purposes.

To be sure, a big chunk of the benefits to thrift insiders goes to the Employee Stock Ownership Plan, a tax-qualified retirement plan for nearly all employees. The ESOP's shares will be allocated to eligible employees over 10 years. …