We’re never REALLY surprised at the things that wind up in what we’ve come to call the Friday Night Dump — that 90 minute period after the markets close on a Friday, but the SEC remains open for filings. Our own research shows that nearly 9% of all 8Ks filed in a given week are filed after 4 pm on a Friday, which depending on your view of the world is either due to companies rushing to get things in before the weekend or hoping to bury them in plain sight.
Most of what we find in the Friday Night Dump, we publish for Pro subscribers. In fact, we have a separate category just for those disclosures for Pro subscribers. But now that a few days have passed, we decided to share one particularly juicy find from last Friday night’s dump.
At 5:01 pm on Friday afternoon, Big Lots filed this 8-K, which tackled a number of different things, including the passing of the torch from now-former CEO Steven Fishman to David Campisi, who took over last week. Because both of those items had previously been announced, we’re guessing that most people stopped reading, which is too bad, because the good stuff — about a three year “Retirement and Consulting Agreement” with Fishman — is all the way at the bottom. Here’s a snip:
“In exchange for his provision of the consulting services and the other covenants in the RCA, we will reimburse Mr. Fishman the reasonable expenses he incurs in the performance of the consulting services, pay him a monthly consulting fee of $77,777, permit him to continue to use the automobile we currently furnish to him, provide him with welfare benefits equivalent to his current welfare benefits and, subject to his execution of a general release of claims, permit him to be eligible to receive a special retainer equal to the amount, if any, that he would have otherwise been entitled to receive under our fiscal 2013 bonus program.”
We don’t know what kind of car it is, but in the most recent proxy, the company values the perk at around $22K a year, so it’s not a beater. There’s also over 300,000 shares of stock that are tied to his continued service as a consultant. As for the salary, it works out to about a 50% pay-cut to consult compared with when Fishman was presumably working full-time.
Needless to say, the press release announcing Campisi’s appointment made no mention that Fishman would continue on as a highly compensated consultant. In fact, there’s a line in there that’s almost laughable, given the generous agreement: “We know he (Fishman) will be watching closely our progress and we wish him all the best in his retirement.”
But wait….there’s more. If you actually read the consulting agreement that’s attached to the filing, two things quickly become clear: Fishman isn’t required to work a specific set of hours. In fact, the agreement even says he can “render the Consulting Services by phone or via e-mail.” But the part that really got us was the clause in section 2 (i): if Fishman dies before the three year consulting contract is up, the company will continue to pay his estate the $77,777 a month.
It’s no secret why Fishman is stepping down. The negative attention that comes with an FBI probe of his insider trading patterns isn’t exactly a positive for the company. But the real mystery is why Big Lots board would agree to something like this, even if they did try to bury it on a Friday night.