In a top-level shake-up before Union Bank is acquired by a subsidiary of Bank of Tokyo, sources say three key executives are leaving Union and that its president will be elevated to head the Los Angeles division of the newly merged bank.
The $750-million sale of Los Angeles-based Union Bank, California’s fifth-largest, is scheduled to be completed Monday, when it will be merged with California First Bank of San Francisco, which is 77% owned by Bank of Tokyo and is the sixth-largest bank in California.
The new combined bank will be called Union Bank, with dual headquarters in San Francisco and Los Angeles. It will have assets of $15 billion.
Donne P. Moen, a veteran Union Bank employee who has been its president since 1987, will become head of the UB division of the new bank, according to several sources within the bank. He will be the highest-ranking American in the new organization.
The elevation of Moen to head what will essentially be the old Union Bank under the new organization was seen by insiders and industry observers as an attempt to signal a continuity to Union employees.
His division will retain its Los Angeles headquarters and a high degree of autonomy during a transition period expected to last a year or more, according to Cal First officials.
Exercised Option to Leave
Moen, 52, is jumping past Union Bank Chairman John F. Harrigan, who has a long-term contract, the sources said. Harrigan, 63, is expected to remain as a consultant and member of the board of the new bank.
The three executives who are leaving next week are all longtime Union Bank employees who exercised their option to exit with sizable severance packages in connection with the sale of Union Bank by its British owners, Standard Chartered, according to sources.
It could not be determined whether the departing executives were asked to leave or resigned on their own. The executives either refused to comment on the circumstances surrounding their departures or did not return telephone calls.
The three officials who are leaving Monday, according to sources, are all executive vice presidents, the highest rank below president and chairman. The bank has nine executive vice presidents. A fourth executive vice president rumored to be leaving said in an interview that he has not decided to resign.
Those who are said by the sources to be resigning are Steven D. Broidy, 50, who has headed several key areas of the bank during the past 16 years and will join the Los Angeles law firm of Loeb & Loeb; Jack A. Frazee, 50, the bank’s chief financial officer, and Neil E. Kennedy, 59, chief of corporate strategy.
Broidy, the only one of the three who returned a reporter’s telephone call, acknowledged that he is leaving but refused to say why. “You’d have to ask the bank that,” he said.
Patricia K. Sisley, public relations manager at Union Bank, refused to comment and said Moen would not agree to an interview about his new duties. The chief spokesman for California First, Larry Boggs, declined to confirm or deny the personnel changes.
Several other managers at the level of senior vice president and below are also either leaving or actively looking for new jobs, according to several sources inside Union Bank and at rival institutions.
Pay, Benefits Issues
California First has said that few actual layoffs are expected in the acquisition but that 640 positions--about 8% of the combined staffs--are expected to be eliminated through attrition over the next two to three years. Some duplications in administrative positions, such as at the executive vice president level, are expected to be eliminated very quickly, however.
California First and Union executives have been trying to balance cost cutting with the necessity of keeping morale high at both institutions and retaining key personnel at Union Bank. An issue that has caused some concern is the higher pay scale and more generous benefits in some areas at Union Bank, compared to California First.