Post-settlement, pre-merger housecleaning…
Last week, Mercury Interactive (MERQ) announced that it had proposed a $35 million settlement with the SEC over stock option issues and a formal investigation. By the end of the year, Mercury is expected to become a part of Hewlett Packard (HPQ) in a $4.5 billion deal.
So perhaps it should come as no surprise that Mercury decided to do a bit of housecleaning in the 10-K it filed yesterday by disclosing how much it has spent over the past three years to provide former CFO Doug Smith with a car: $250K. In the filing, it’s not clear whether the company meant an actual car service, of the Town Car variety, or whether it was an expense to provide Smith with a car. What is clear is that they spent $88K in fiscal 2005 on the service, $89K in fiscal 2004 and another $72K in fiscal 2003 on providing the perk, not to mention the obligatory tax gross-up. Though Mercury has provided limited disclosure on this perk for Smith in the past, it hasn’t been consistent. For example, in last year’s proxy, the company disclosed spending $80.7K in fiscal 2002, but nothing in 2003 for Smith’s car service. Then, for 2004, it says it spent $84.3K, which doesn’t match the number in the current filing.
So what do you think? Did Mercury spend the money on a Town Car or an S-Class? Footnoted.org reports. You decide.
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 4 Comments » |
October 6th, 2006 at 10:28 am
Congrats on the participation w/ Wallstrip.
I subscribed and think it went thru. Not a
fan of their using letters not numbers as the
human check method. Their letters are hard to
distinguish. Never had to guess with sites that use usual numbers.
It gave me this ok message but also popped up
another set of letters. Go fig.
will be added to the email subscription list for “Wallstrip.com.â€
October 6th, 2006 at 11:24 am
Given the $ amounts in question – I am assuming S class WITH driver.
October 8th, 2006 at 6:51 pm
What is a tax gross-up?
October 9th, 2006 at 9:59 am
A tax gross up is a payment that is made to cover the IRS bill for a particular perk, such as the cost of providing car service. It’s become a very common perk, particularly in mergers when lots of options vest in one fell swoop. Slate’s Dan Gross did a good explainer on tax gross-ups here.