Loans-for-shares scheme to motivate Heartland execs
Would-be bank Heartland is lending senior executives up to $1.517 million to buy its shares as part of a plan to keep them at the company and to improve its performance.
The company announced the 2012 Long Term Executive Share Plan yesterday. It will include senior management of Heartland, a lender which was formed 18 months ago from the merger of Marac Finance with two building societies, and later Heartland bought a finance company as well.
Heartland will make interest- free loans to the executives to buy the shares at market prices. The amount would not be more than $1,517,000.
Legal title to the shares will be held by a trustee and will be transferred to the executives if they meet certain performance hurdles. If they do, they will be eligible for a cash bonus, equal to the amount of the loan for the shares, and the loan will be repaid from the cash bonus. If they don't meet the performance hurdles the trustee will acquire the shares for the price of the loan which will be repaid that way.
Meanwhile, Heartland is advising its shareholders over repeated and unsolicited low-priced offers for Heartland shares to consider several issues. The company said it could not stop the offers because it was not illegal to offer a low price for a share.
Australian trader John Armour, through his company Stock & Share Trading has offered to buy the Heartland shares for 40c a share in late March, 33c a share in late May and 30c a share in late June. Yesterday Heartland shares were trading at 56c.
Heartland said shareholders should check the offer, who was making it, whether they were trustworthy, what the price was compared with the market price on the NZX, and importantly when the shareholder might get paid.
- The Press
Would you like to see the Heathcote River cleaned up?Related story: Alasdair Cassels to beautify Heathcote River