There have been plenty of articles lately about the struggles of computer-maker Dell (DELL), particularly after sagging computer sales led the company to miss analyst estimates earlier this week, sending its stock down sharply.
So we were particularly interested to see Dell’s proxy cross our virtual desk just before 4:15 p.m. yesterday. And, as has happened so often with this particular company, we weren’t disappointed. Indeed, we’ve footnoted Dell quite a bit over the years. Some of our favorites include this post from June 2008 describing the purchase of a company from founder, Chief Executive and Chairman Michael S. Dell’s brother and this one from last year’s proxy detailing security costs for Michael Dell.
This year’s filing showed that Dell (the man) did quite well for himself at Dell, the company — better than he has in years, anyway. His total compensation topped $16.1 million, more than 3.5 times what he made last year ($4.3 million). The biggest chunk of the increase consisted of stock awards ($9.4 million) and options ($2.4 million) where he got none last year. But he also got a $3.3 million cash bonus, up 25% from the prior year.
That was just the beginning, however. The boss’s perks were quite modest — barely over $14,000, all for retirement and benefit plan expenses — but others fared better: Stephen F. Schuckenbrock, whose title is “President, Services”, got a whopping $1.9 million in relocation benefits — to move from Round Rock, Texas, just outside Austin, to Plano, Texas, just outside Dallas.
Granted, Texas is a big state, but that’s still only about 200 miles, or $9,655.19 a mile. Most of this amounted to “a cash payment of $1,500,000 to compensate him for the loss on the sale of his house in the Austin, Texas area.” That’s an awfully big number to pass along to Dell shareholders, and suggests an awfully nice house — Zillow says the city’s median is $249,000, and we’re pretty sure Austin home prices haven’t fallen to zero. But even excluding that number, he still got pretty close to $2,079 a mile for the move. Too bad the proxy doesn’t break the figure down a little more — we’d love to know how they arrived at it.
Dell’s board has its eye on the small stuff, too. And in the process, they’ve given us some insight into the company’s products as well. Dell’s board, like most of those overseeing major companies, makes pretty good money: an average of $287,000 or so all-in. Most of that consists of stock awards, but a number of the directors also got free gadgets.
Dell is far from the only company to give its directors swag, and it’s also far from the most generous at this particular game. But it still tells us something that it gave nine of its directors Dell Vostro computers, valued at $903 apiece, based on the actual expense to Dell. Sadly, the company doesn’t say which Vostro the directors got, but when we went whole-hog on Dell’s website, maxing out the memory, drive size and other features of the biggest Vostro laptop we could find, we couldn’t get much over $1,500 retail without throwing in extras like a printer, extra battery or stylin’ backpack. One lucky director — outgoing board member Thomas W. Luce III — also got a Dell Venue Pro smartphone, which is valued at $300 in the proxy, and listed at $299 on Dell’s website, but in fact seems to no longer be available.
Then there are the various related-party transactions with Michael Dell, which we’ve footnoted before (including in May 2011 and May 2010). Once again, Dell the CEO reimbursed Dell the company for “his and his family’s personal security protection,” to the tune of $2.7 million (down from $3.3 million in fiscal 2011). Companies owned by Dell and his wife also bought $1.6 million of goods and services from the computer company, at arm’s length, we’re assured (and up from $1.3 million previously).
But there’s a new airplane deal for fiscal 2012. In the past, the company noted, it has leased Michael Dell’s airplane from him directly. Instead, this past fiscal year,
“the company contracted with an independent aircraft leasing agency to provide private air travel to Mr. Dell. This agency in turn leases the same aircraft … from Mr. Dell’s wholly-owned entities. During Fiscal 2012, Dell paid approximately$2,300,000 for Mr. Dell’s travel through these arrangements.”
Whether or not it’s because the company went about things more circuitously, that cost is down by about a half-million dollars from last year’s proxy disclosure.
Despite the miss and the shareholder disappointment earlier this week, Dell shares actually did pretty well last year, so we’re not sure shareholders are going to get terribly worked up about any of this.
Then again, the company’s total return has trailed its industry in every calendar year since at least 2005, and is lagging both the industry and the S&P 500 over the last three-month, one-year, three-year, five-year, and 10-year periods. Maybe shareholders will care after all.
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