The big news in Rhode Island’s business community today is the sale of Bank Rhode Island to Massachusetts’ Brookline Bancorp for $234 million in cash and stock.
BankRI’s share price has soared as much as 52% in Nasdaq trading today – from $30.71 a share when the market closed yesterday afternoon to $44.50 at this writing – following announcement of the deal, which values the company at $48.25 a share.
That jump in the stock price is good news for BankRI’s top executives, three of whose compensation jumped last year thanks to big awards of company shares: Chief Financial Officer Linda Simmons, Chief Lending Officer Mark Meiklejohn and Chief Information Officer Robert Wischnowsky.
The biggest beneficiary from the sale, though, may be Malcolm G. Chace III, BankRI’s 76-year-old co-founder and chairman, who is also a former board member at Warren Buffett’s famed Berkshire Hathaway and a well-known Rhode Island philanthropist.
Chace owned 12.5% of BankRI’s common stock as of Dec. 31. The value of his 588,281 shares has soared from $18.1 million Tuesday afternoon to $26.2 million at midday today – an $8.1 million gain in less than 24 hours.
After Chace, the next biggest beneficiary will be fellow current CEO Merrill Sherman. The 62-year-old co-founder’s 289,398 shares – 6% of the company’s stock – rose in value from $8.9 million Tuesday afternoon to $12.9 million today, a cool $4 million gain overnight.
Of course, in both cases those gains will only exist on paper until the shares are sold.
Among the current executives, Meiklejohn was the biggest winner last year.
The chief lending officer’s compensation package doubled from $350,027 in 2009 to $695,366 in 2010 after he received stock and options awards worth $351,520. Meiklejohn’s salary was $281,308 and he also got a cash bonus (technically, “non-equity incentive plan compensation”) of $119,751.
CIO Wischnowsky’s pay package rose 82% last year, from $376,205 in 2009 to $682,933 in 2010. His $250,000 salary was boosted by $305,471 in stock and options awards and $127,662 in cash bonuses.
CFO Simmons’ package totaled $776,224 in 2010, up 63% from the $474,996 she received in 2009, and included her $281,308 salary; $351,520 in stock and options awards; and a $135,875 cash bonus.
CEO Sherman’s pay grew 10% to $929,080 in 2010, while its Macrolease division’s president, Daniel West, saw his rise 7% to $265,990.
Since the values of the executives’ stock awards are based on an older share price, each of those compensation packages is likely far more valuable today than it was when the company disclosed them in an SEC filing last week. BankRI also said some of the stock awards will become available sooner because of the Brookline takeover, unless shareholders reject the deal.
Eyewitness News reporter Tim White contributed to this report.
(photo: Bancorp Rhode Island)