THEY'D RATHER BE LAID OFF : 1ST INTERSTATE WORKERS GET FAT SEVERANCE PAY IN WELLS FARGO MERGER.Byline: E. Scott Reckard Associated Press Associated Press: see news agency. Associated Press (AP) Cooperative news agency, the oldest and largest in the U.S. and long the largest in the world. There are workers threatened by downsizing (1) Converting mainframe and mini-based systems to client/server LANs. (2) To reduce equipment and associated costs by switching to a less-expensive system. (jargon) downsizing . There are people whose welfare benefits may be cut. And then there are employees of First Interstate Bank, recently acquired by Wells Fargo Wells Fargo armored carriers of bullion. [Am. Hist.: Brewer Dictionary, 1147] See : Protectiveness Wells Fargo company that handled express service to western states; often robbed. [Am. Hist. in an $11 billion deal. Their message to their new employer: ``Fire me, please.'' The reason is the lucrative severance packages A severance package is pay and benefits an employee receives when they leave employment at a company. In addition to the employee's remaining regular pay, it may include some of the following:
First Interstate employees at the executive vice president level and up could - and did - walk out at will with guaranteed fat paychecks. Indeed, the top nine executives got three years' severance each, in addition to lucrative stock options and other compensation. But for the average worker and even midlevel mid·lev·el n. The middle stage or level, as in a series, course of action, or career. managers, to go or stay was Wells Fargo's decision. And that made for some interesting conversations when former First Interstate staffers had their interviews with Wells Fargo managers about their future prospects. ``Eventually they'd get around to saying, `You know, I really don't want to work here,' '' said a former employee, speaking on condition of anonymity. When First Interstate agreed to merge with First Bank System, it adopted First Bank's generous plan for severance in the event of a change in control of the bank. The central provision for most workers was four weeks' pay for each year of service, up to 24 months' wages, with full benefits. Midlevel managers with a year on the job were guaranteed a minimum of a year's pay upon receipt of a pink slip. To First Interstate executives, it seemed a good way to help keep Wells Fargo at bay by making a takeover more costly. First Bank intended to lay off far fewer workers, since its operations barely overlapped First Interstate's. But Wells Fargo operates only in California, First Interstate's home turf, and planned to fire far more employees after a merger. At the time, estimates of First Bank layoffs were running about 1,500 and Wells Fargo, 10,000. Wells Fargo so far has announced it will lay off about 7,200 workers. Wells Fargo, in the middle of a hostile takeover Hostile Takeover A takeover attempt that is strongly resisted by the target firm. Notes: Hostile takeovers are usually bad news, as the employee moral of the target firm can quickly turn to animosity against the acquiring firm. , struggling to persuade shareholders and regulators of its merits, decided it had to accept the generous severance provisions. ``It was, frankly, part of greasing the skids Skids can refer to:
Cal Fed agreed last month to sell itself to San Francisco San Francisco (săn frănsĭs`kō), city (1990 pop. 723,959), coextensive with San Francisco co., W Calif., on the tip of a peninsula between the Pacific Ocean and San Francisco Bay, which are connected by the strait known as the Golden rival First Nationwide Holdings for $1.2 billion. Layoffs are likely, and as part of the deal, Harshfield negotiated an increase in severance pay Severance Pay Compensation that an employer gives to someone who is about to lose their job. Notes: Severance pay is not always paid to employees. It depends on the situation in which the employee is losing their job and whether legislation requires severance to be paid. for Cal Fed employees to three weeks per year of service, capped at a year's pay. But that generous package pales beside the First Interstate deal of four weeks per year with a two-year cap. Indeed, for many First Interstate employees, that meant a windfall. ``Had I worked for Wells, I'd be looking at a year (of severance pay) instead of 21 months,'' said Patricia A. Stuhff, 45, a 23-year First Interstate employee. The last 13 of those years were spent as an event planner - experience Stuhff is now calling upon to start a new career. Stuhff used her expertise at directors' conferences, testimonial dinners and business development meetings to open her own event planning Event planning is the process of planning a festival, ceremony, competition, party, or convention. Event planning includes budgeting, establishing date and alternate date (rain date), selecting and reserving the event site, acquiring permits, and coordinating transportation business: Expert Ease, world headquarters in her home, start-up date May 1, her first day unemployed. She'll continue to draw full pay and benefits from her former job until January 1998 while she tests her entrepreneurial skills. So far, things are going well, she says, thanks to the contacts she has made over the years. Wells Fargo spokeswoman Lorna Doubet said the bank lost many experienced employees it would have liked to keep because of a provision that they can choose to be laid off rather than relocate. As of late July, Wells Fargo had completed only about 4,800 of the 7,200 layoffs it has estimated will take place by the end of the year. Still, buying First Interstate was too important a priority to be stopped by high severance costs, officials said. ``It was something we had to accept if we were going to complete the merger,'' Doubet said. CAPTION(S): Photo Photo: (Color) Patricia Stuhff has been using her generousseverance payment from First Interstate to establish her own business. Associated Press |
|
||||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion