Yellow | Congressional Panel Questions $700 Million Loan To Yrc Worldwide

[dokman]

YRC loan under scrutiny; board shied away from company stock in 2019

YRC board members changed their comp plan to favor cash over the company’s stock at the end of 2019

https://www.freightwaves.com/news/yrc-loan-under-scrutiny;-board-shied-away-from-company-stock-in-2019

YRC’s board favored cash compensation over company stock
YRC’s board of directors may not have had much faith in the company’s equity either. At the end of 2019, compensation plans for directors on the board were amended to allow for a higher percentage of cash payment, minimizing the portion of stock-based compensation.


The 2019 comp plan for nonemployee directors on the board at YRC paid a $75,000 cash retainer, $125,000 for the chairman, and amounts ranging from $10,000 to $25,000 for service committee chairs. Further, directors who served on labor or strategy committees that commenced one year ahead of the ratification of the new labor deal received an additional $40,000 annually.

The director compensation plan was amended and restated on Feb. 11, 2019, when shares of YRCW closed the day at $6.80. That amendment allowed an annual fully vested restricted stock unit (RSU) award equal to $125,000 with a settlement date three years after the grant date. The amendment also provided one-time performance RSUs equal to $152,760. Those units had an additional vesting requirement that YRCW’s average share price equal or exceed $11.75 for a 30-day period prior to the end of 2020, a level not seen since early 2018.

The performance RSUs “were awarded in addition to the Annual RSUs for the directors’ oversight of Company’s management in developing a comprehensive business strategy to achieve long-term profitability and stability for the Company.”

All of 2019’s directors ended up forfeiting the performance RSUs given the unlikelihood of achieving that stock price threshold.

At the end of 2019, faced with the unlikelihood of reaching and sustaining the $11.75 share price, the board decided to adopt a new, nonemployee director compensation plan favoring cash payments versus equity.

On Dec. 9, the board adopted a new director plan paying an annual cash retainer of $190,000, $300,000 for the chairman. Equity comp was reduced from $125,000 to $60,000. The new $250,000 package, excluding the performance RSUs, represented a $50,000 increase in pay and importantly doubled the percentage of cash compensation to 76%.

YRCW’s closing share price was $3.06 on Dec. 9, a 55% decline from the February amendment.

Gee wouldn’t you vote for your own raise?

 

[Puff Driver]

My question is: since the Government technically now owns 29plus% of YRCW- doesn’t that mean they’ve committed to owning the Liability to the Pensions? Any Private buyer would have to accept responsibility, so, why not Government then?

Good point, maybe another Hoffa deal..
Worked for UPS???

 

[grimreaper]

the big yellow dog sponged off drivers for years ... it looks like they now wanted to suck the life outta the taxpayers on this ' loan' ..looks like oversight is saving American taxpayers and is doing what we should have done years ago and stood up to the greed of this dog ...

 

[Triplex]

the big yellow dog sponged off drivers for years ... it looks like they now wanted to suck the life outta the taxpayers on this ' loan' ..looks like oversight is saving American taxpayers and is doing what we should have done years ago and stood up to the greed of this dog ...

While we all need to keep a watch on government spending lets put this into perspective. Federal spending for 2020 is expected to be $4.685 trillion dollars. The YRCW loan (not a grant, but a LOAN) is $700 million. That amounts to about 0.015% of the expected government spending for the year. Or, put in other terms, about $2 for each person in the US. No one is sucking the life out of me for $2.

And as far as "sponging off drivers", we all had a vote on the concessions. Nothing was forced. Just saying.

 

[Freight Shaker]

I am in the understanding that no company will buy YRCW because it would obligate them to the pension liability? (i. e.- UPS paid $6 billion to get out of CSPF, and- if they bought YRCW, it would re-obligate them to CSPF liability.)If so, why not when the Government becomes a 29% owner? The article didn’t just say government became stockholders- it said the Government became part Owner. Would it only happen when the Part Owner becomes the Controlling Owner?

There's a difference between being a stockholder and a corporation. Like when Yellow Roadway bought Holland. They bought the assets, name, debt, etc... Rolled us into one big happy family!

When a person or group buys shares of stock, or grants themself or their peers stock options, they ride the wave of the stock price. They don't own any of the assets (not that we really have any). By the same token they also don't take on any of the financial obligations. Your average Joe that owns 1000 shares of YRC isn't on the hook for its debts or for that matter making sure our pay checks don't bounce. Average Joe can't come into a terminal and say I own a thousand shares worth about $3,000 give me a desk and a tractor tire the settle up my account.

Now the government is giving YRC a loan and seems to me the stock is 'collateral'. But they don't take on responsibility for the debt, etc. Sweet for us if they did, however.

 

[grimreaper]

While we all need to keep a watch on government spending lets put this into perspective. Federal spending for 2020 is expected to be $4.685 trillion dollars. The YRCW loan (not a grant, but a LOAN) is $700 million. That amounts to about 0.015% of the expected government spending for the year. Or, put in other terms, about $2 for each person in the US. No one is sucking the life out of me for $2.

And as far as "sponging off drivers", we all had a vote on the concessions. Nothing was forced. Just saying.

call

While we all need to keep a watch on government spending lets put this into perspective. Federal spending for 2020 is expected to be $4.685 trillion dollars. The YRCW loan (not a grant, but a LOAN) is $700 million. That amounts to about 0.015% of the expected government spending for the year. Or, put in other terms, about $2 for each person in the US. No one is sucking the life out of me for $2.

And as far as "sponging off drivers", we all had a vote on the concessions. Nothing was forced. Just saying.

700 million so we can insurance until Aug 1 ... the concession was voted on 4 times and 'until we got it right' .. so we can still be the lowest paid union/ non union LTL carrier in existence

 

[Triplex]

700 million so we can insurance until Aug 1 ... the concession was voted on 4 times and 'until we got it right' .. so we can still be the lowest paid union/ non union LTL carrier in existence

But we are still in existence unlike CF, St. Johnsbury, PIE, Associated, Mason-Dixon, Branch, Lombard, Cooper-Jarrett, Maislin, etc., etc., etc., etc.