HR Strange But True!
March 11, 2005

The top two executives of the Buffalo, New York-based M&T Bank Corp. have chosen not to accept their stock options this year. Instead, they'll divide them among 10,000 bank employees, from tellers to data-entry clerks.

The decision by Chairman and Chief Executive Officer Robert G. Wilmers and Vice President Robert E. Sadler Jr. means that M&T employees who have been with the bank for more than a year--including part-timers--will get 10 or 20 options, which will allow them to buy stock at today's prices when the options vest in several years, the Baltimore Sun reports.

M&T Chief Financial Officer Michael P. Pinto told the Sun that the bank has periodically given employees the chance to own stock through options--the last time was in 1999--as a way to retain and motivate them. The bank also believes managers should own stock so that their fortunes are aligned with those of shareholders, he said.

"We like to have employees stay with us for a long time," Pinto said, "and it seems to be working in terms of making people excited to work with us."

Though more companies have been granting stock options to broader swaths of their workforces, it's unusual for anyone to award options to rank-and-file workers but not to executives, said Diane Posnak, managing director at Pearl Meyer & Partners, a compensation consulting firm.

"I've hardly ever seen that," Posnak told the Sun. "Usually, if they don't want the options, they don't give them to anyone."

She also observed that giving employees a stake in the growth of the bank could backfire if the stock price falls, explaining that employees don't have much of an impact on the financial performance, which determines how the market values the bank's shares. Still, she said, employees will appreciate the sentiment.

"I think the message they're trying to send is, they care about these people," she said, "and they're also saying they think the stock will be worth something."

Source: Baltimore Sun

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