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© 1998 The Auburn Plainsman |
Dye profits from bank connection
By Jennifer Morris Assistant Campus Editor
Former Auburn football coach Pat Dye exercised his stock option as director of Colonial BancGroup this fall. Dye bought 50,000 shares of common stock at a fraction of their usual cost, according to the bank's Securities and Exchange Commission filings. He paid $1.54-$1.81 for each share on Sept. 14 of this year. The stock usually costs nearly $13 per share. Dye had the right to buy shares at this price because of his position with the bank. "The process is perfectly legal," said John Jahera, professor of finance and head of the finance department at the University. Oftentimes, companies offer these stock options as "deferred compensation" to its officers and directors. "It's not uncommon at all," Jahera said. Glenda Allred, assistant to the chairman of Colonial BancGroup, said this type of transaction does happen often with public institutions. The stocks bring Dye's total holdings in the BancGroup to about $800,000. He owns a total of 61,190 shares of stock. Dye is one of 5,700 shareholders in the company. He now owns 5.58 percent of the company's 109,664,000 shares of outstanding stocks. University Senate Chairman Glenn Howze said, "I'm sure it's legal, but it's still a strange occurrence. I think it would be hard to find another example of this." "It sounds like a sweetheart deal to me," Howze said. If Dye were to sell the stocks he bought in September at today's value, he would make over half a million dollars. "I'm dumbfounded" that he could make that much money with one transaction," Howze said. Dye was appointed to Colonial BancGroup's Board of Directors in 1981, Allred said. That was the same year he began coaching Auburn's football team. |
