Magazine article American Banker

Nevada Chairman's $100-Million Bet

Magazine article American Banker

Nevada Chairman's $100-Million Bet

Article excerpt

First National Bank Holding Co. in Scottsdale, Ariz., had been growing by leaps and bounds, and its sole shareholder thought he should do something to let employees know that he wasn't fattening the company for a sale.

So last year Raymond Lamb promised First National's employees - all 1,200 of them - that he would pay them a year's salary in cash if he sold the company before 2010.

"I wanted to give them something concrete, to assure them that we were not going to get bought by a larger bank," said Mr. Lamb, who is also the $2.7 billion-asset company's chairman and chief executive.

Why? Because "most mergers involve publicly traded banking entities, and they have to show to their shareholders that any acquisition would be accretive to earnings," Mr. Lamb said. "The only way they can assure that is by cutting expenses, and generally that requires a very severe cut in employees."

First National's board voted on March 1 of last year to include the promise in the contracts of those who were working at that time for the company and its subsidiaries, First National Bank of Arizona and First National Bank of Nevada.

Two conditions must be met for them to receive a payout: The employees have to remain until March 1, 2010, and Mr. Lamb has to sell. "But I absolutely have no reason, nor desire, nor intention to sell," he said.

A big reason for this insistence is that his three children are officers at First National, and he wants to be sure they'll always have jobs there. …

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