The CEO of Commerce Bancorp, Vernon W. Hill, is out of a job today.
Mr. Hill, founder of the company, was pushed out by the very same board of directors that he had hand-picked to serve over the years (we reviewed Commerce’s code of conduct in the last issue of Ethisphere Magazine by the way and were quite confused by it).
The reason for the board’s turn? Quite simply, federal bank regulators said they would no longer allow the bank to open up any more branches as long as Mr. Hill remained at the helm.
The bank is already operating under a cease-and-desist order with regulators, which required it to stop entering into contracts with businesses run by its board members, officers, and members of their families. The federal Office of the Comptroller of the Currency is also looking into possible illegal insider dealing at Commerce, with the primary focus on Mr. Hill.
Yesterday’s New York Times wrote an excellent and interesting piece on Mr. Hill, which makes Donald Trump look good (and relatively discrete if at all possible) in comparison. The story divulged information which would make it seem that the word “excess” does not appear in Mr. Hill’s dictionary:
Hill openly awarded tens of millions of dollars in contracts to friends and relatives, including about $50 million to his wife, who decorated and designed many of the nearly 450 branches (and would conduct surprise inspections with her Yorkie, Sir Duffield) and…built a 46,000-square-foot Tuscan-style mansion in Moorestown, NJ where a farmhouse once stood, complete a 4,000-square-foot gym (and overseeing construction via a helicopter in order to give construction crews orders via megaphone).
Click here to read the whole story (free registration may be required).
Commentary: Sir Duffield? This guy is unreal. Anyhow, this also is not Commerce Bank’s first brush with the law. In 2005, two senior executives were convicted of conspiracy for giving loans to the Philadelphia city treasurer in exchange for the city’s financial business. The city treasurer was found guilty of fraud. Municipal underwriting has been a huge profit driver for Commerce over the years.
August 2nd, 2007 at 1:25 am
I’m all for ethics, but maybe…just maybe, you’re jumping the gun a bit here.
Half of the homes in the state of New Jersey are built on old farms / farmhouses. His home isn’t as large as is constantly reported…the 48,000 includes the basement (16,000). Sure, 32,000 is still huge, but it’s not the White House. He also preserved 50 or so acres around it from ever being developed.
His wife’s firm made a lot, but it’s a little more than $100,000 per branch for what has become a very successful brand. She may have been overpaid, but not by $50M.
The Philly issue was 2 guys doing things they shouldn’t have. I’m sure there are other companies who have had a few bad eggs.
What people resent more than anything is his association with George Norcross. Buying George’s influence within the Democratic Party (by acquiring his company) was a deal with the devil.
Vernon Hill is no angel, but it’s entirely possible he’s not as evil as many would like to believe.