It seems Henrique de Campos Meirelles, in stepping down as FleetBoston Financial's ( FBF) president for global banking to run for congress in Brazil, may be giving up a bit more than the $2 million in salary and bonuses he received last year from the nation's seventh-largest bank. He now may have to speed up the repayment of a $4.5 million no-interest loan he got from Fleet two years ago to finance his relocation from Massachusetts to a home he bought in New York. If he had remained at Fleet, Meirelles, the third-most powerful executive at the bank, probably wouldn't have had to make any payments on the loan until 2011. In fact, Fleet's most recent proxy statement says that as of Dec. 31, 2001, the full amount of the loan was still outstanding. But Meirelles' decision to leave Fleet apparently alters the conditions of that deal. And it completes an episode of the kind of corporate self-dealing that some say has helped undermine investor confidence.
column by RealMoney writer Arne Alsin drew attention to those transactions. ( RealMoney is the subscription sister site of TheStreet.com.) Alsin said the insider deals "aren't characteristic of a management team that carefully husbands shareholder capital." After the column appeared, Commerce, which has been one of the top-performing bank stocks this year, dropped 9%. "They are not uncommon and they've been blessed by the bank examiners," Jones says of the lease deals. "But we are going to adjust. We're in the process of addressing all of these related-party transactions or trying to unwind or change as many as possible." Whatever the reason behind the change in attitude at Commerce Bank, it's refreshing to see.