The $2 billion First Carolina Corporate Credit Union joined all other corporates except the $100 million Iowa Central Corporate CU in participating in the Temporary Corporate Credit Union Share Guarantee Program. The board of the Greensboro, N.C.-based corporate signed the revised Letter of Understanding and Agreement earlier this month.
“Frankly, the revised Share Guarantee Program is a better deal and addressed many of the issues that we had concerns with in the prior program,” said David Brehmer, president/CEO of First Carolina. “We appreciate the time NCUA's staff and board took to take another look and make certain changes and we support their efforts to stabilize liquidity within the corporate system to minimize future losses to credit unions.”
Like other original holdout corporates, First Carolina's board originally turned down the program over concerns about protecting member credit unions' capital, as well as protecting the membership's ability to have a voice in determining its corporate's own future. Program improvements, as well as liquidity considerations, the current recapitalization effort, member feedback and the changing corporate network landscape were all listed as reasons behind the change of heart.
The guarantee program covers uninsured shares, excluding capital accounts, through at least Sept. 30, 2011, with quarterly extensions available through Dec. 31, 2014.
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Survey: Executive Pay Will Change

A recent Watson Wyatt survey suggests that change is coming to executive pay programs.
The survey found that a majority of corporate board directors believe that the executive pay programs of U.S. companies need to change as a result of the financial crisis.
Some 63% of outside directors said they believe American companies should modify their executive compensation programs to adapt to new economic realities, according to the survey. In addition, 68% of directors are not concerned or only slightly to moderately concerned about the retention of high-performing executives, and 70% of directors expect executive pay opportunity to decline over the next two years.
The survey also found that 54% of directors do not expect legislation to have a significant impact on executive pay for performance.
“Directors face an increasingly difficult challenge against the backdrop of a very tough economy and intense outside scrutiny. For incentive pay programs to be effective, they must be motivational and reward executives well for delivering strong performances. At the same time, compensation programs must satisfy shareholders by safeguarding against misaligned incentives, pay for failure and excessive risk taking,” said Andrew Goldstein, North American co-leader of executive compensation consulting at Watson Wyatt. “The onus is on directors and management to achieve that balance.”
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Zillow Finds Hope on Home Values

Seventy-four percent of Americans believe their home will not decline in value in the coming six months, according to the Zillow's first-quarter homeowner confidence survey. One in four homeowners think their home's value will increase in the next six months, while nearly half believe their home's value will remain the same.
Homeowners were similarly optimistic when it came to predicting home values in their local markets. About two-thirds of homeowners believe home values in their local markets will increase or stay the same over the next six months. Thirty-seven percent believe home values will decrease.
Sixty percent of American homeowners believe their own home lost value during the past 12 months. In reality, 80% of homes across the country lost value during the past 12 months, according to Zillow's first- quarter 2009 real estate market reports. Additionally, 18% believe their home gained value in the past 12 months, and 22% believe its value remained the same.
Those statistics produced a score of 5 on this quarter's Zillow Home Value Misperception Index, which measures what a home is worth versus what a homeowner believes it's worth. The first-quarter 2009 score is the lowest it has been since Zillow introduced the index in second-quarter 2008 and down from 10 in fourth-quarter 2008. A Misperception Index of zero would mean homeowners perceptions' were in line with actual values.
As for selling activity, it's clear a significant number of potential sellers are holding back due to the current market. When asked about future plans to sell, 31% of homeowners said they would be at least “somewhat likely” to put their homes on the market in the next 12 months if they saw signs of a real estate market turnaround.
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