Exhibit 99.14
Sovereign bows to critics of bonus plan
By David Weidner, MarketWatch
August 5, 2005
NEW YORK (MarketWatch)—Sovereign Bancorp, under fire from critics over a controversial bonus plan for outside directors, said Friday it will end the program effective Oct. 1.
The Wyomissing, Pa.-based thrift in a filing with the Securities and Exchange Commission, said it will instead pay directors $50,000 and award them $50,000 in company stock annually.
Sovereign also will pay the “lead” director and the chairman of the audit committee an additional $25,000. Other committee chairs will receive $15,000. Directors also will be required to own $200,000 worth of company stock.
Board members for Sovereign’s Sovereign Bank subsidiary will receive $21,000 in cash and $21,000 in stock, according to the filing.
A group of shareholders led by Relational Investors LLC complained in May that in 2004, Sovereign outside directors earned an average paycheck of $313,000. Relational, headed by money manager Ralph Whitworth, threatened a proxy fight over the issue.
Sovereign had based its compensation on whether executive bonus targets had been met. Whitworth argued that the plan created a conflict of interest for the seven-member board.
Sovereign responded by hiring an outside compensation consultant to review the thrift’s pay packages.
Shares of Sovereign fell 5 cents to $23.97 in midday trading.
David Weidner covers Wall Street for MarketWatch.
