“Fathers and Son by Turgenev.”
Now we won’t spend too much time in lit class. This is after all a story about banking. But there’s a bit of irony reading this Russian work right now. Without delving into characters and plot, the novel contains a backdrop of Russia’s legacy of serfdom.
“Lords of the manor were asked to share some of their wealth and distribute it
more equitably. So in a way it’s very relevant.”
It’s hard not to see thematic parallels when you consider last week’s announcements from Regions. In 2008 CEO Dowd Ritter’s compensation went up even though, Regions stock price fell 82%. Ritter turned down a $1.1 million bonus, in favor of restricted stock. If the stock price does goes up, he could earn much more than he turned down. At the same time, the company suspended matching 401(k) contributions for all employees. Not insignificant when you consider Regions is Birmingham’s largest private employer. One more thing worth mentioning. Regions has accepted $3.5 billion dollars in federal bailout money. No wonder no one wants to hug a banker. So how could Regions respond?
“Depending on what kind of crisis type, the organization is given a list sort of, of strategies to chose from.”
Karla Gower directs the University of Alabama’s Plank Center for Leadership in Public Relations.
“You can go from being very defensive and sort of taking a legal strategy saying,
‘We’re not guilty. We didn’t do anything. We’re not responsible.’ To being very
accommodating. ‘Yes, I’m sorry, we screwed up and this is what we’re going to
do about it.'”
Regions declined to comment on tape for this story, but a spokesman released a statement saying stock options and restricted stock are awarded every February as part of an ongoing compensation schedule. The suspension of 401(k) matching was a separate decision designed to help the bank manage through a challenging operating environment. The decisions were not connected and the timing of the announcement was a coincidence. He emphasized the 401(k) decision doesn’t affect take-home pay and allows Regions to preserve 1,400 jobs.
“There is no pleasant decision to make here. The only thing that was really
inopportune was the timing.”
John Wittig directs UAB’s public relations program. He says given two announcements within two days, a comparison is inevitable. If they came two months apart, they would have looked differently. But Wittig says there’s a deeper issue here. Reputation matters. He says Regions has had substantial public relations problems since its merger with AmSouth in 2006.
“The best thing you can get out of a good reputation is the chance to sell your side of the story. And I think AmSouth, Regions, slash, has lost that goodwill in the body politic. And so their side of the story gets lost because nobody cares to listen to them anymore. They don’t believe them.”
Back at the coffee shop, Regions customer Jeremy Hunter doesn’t have much goodwill for the bank. He says it’s depressing when he thinks of what employees are going through. It does change how he sees the bank.
“Not only Regions, but all the large banks here in town. You know everybody
seems to be going to these smaller banks because there’s better service and they
seem to treat their staff better.”
No hugs for the pillars of the banking community right now. Not much sympathy for their messengers either.
— Andrew Yeager, March 13, 2009