Re: U.S. to loan military hauler YRC Worldwide $700 million for nearly 30% stake
Another story on the YRC loan.
YRC loan under scrutiny; board shied away from company stock in 2019
https://www.freightwaves.com/news/yr...-stock-in-2019
Another story on the YRC loan.
YRC loan under scrutiny; board shied away from company stock in 2019
The Treasury Department’s decision to provide debt-burdened less-than-truckload (LTL) carrier YRC Worldwide (NASDAQ: YRCW) $700 million in financing has drawn scrutiny from members of Congress.
A Monday report from the Congressional Oversight Commission created by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), calls into question the designation of YRC, which provides 68% of LTL services to the Defense Department, as a “business critical to maintaining national security.”
Under the federal lending program established by the CARES Act, a “catch-all provision” created by the Treasury Department allows it to determine if a company meets the national defense standard based only on the recommendation and certification of either the secretary of defense or the director of national intelligence.
A Monday report from the Congressional Oversight Commission created by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), calls into question the designation of YRC, which provides 68% of LTL services to the Defense Department, as a “business critical to maintaining national security.”
Under the federal lending program established by the CARES Act, a “catch-all provision” created by the Treasury Department allows it to determine if a company meets the national defense standard based only on the recommendation and certification of either the secretary of defense or the director of national intelligence.
The interest rate on the lending facility was highlighted as well. “The interest rate on YRC’s loan from the Treasury is 4% lower than the interest rate on the company’s most recent debt financing.”
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%.
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%.
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