When a company files a document with the SEC at 5:10 on a Friday evening, it’s a little like waving a red cape at the footnoted staff and yelling, —Look at me! (although, thankfully, there’s no blood and gore involved).
It was a meaty filing in several ways, starting off with the announcement that its top five executives received cash bonuses totaling more than $6.35 million and 110,586 shares of restricted stock for their work in fiscal year 2009. The specific awards were:
- Chairman/CEO John Duffy got $1,575,500 cash and 27,423 shares of restricted stock;
- Vice Chairman/President Andrew Senchak got $1,575,500 cash and 27,423 shares of restricted stock;
- Vice Chairman/COO Thomas Michaud got $1,575,500 cash and 27,423 shares of restricted stock;
- Chief Financial and Administrative Officer/EVP Robert Giambrone got $941,875 cash and 16,394 shares of restricted stock; and
- General Counsel/EVP Mitchell Kleinman got $685,000 cash and 11,923 shares of restricted stock.
A third of each man’s RSUs will vest on February 23 in 2011; another third will vest on February 23, 2012; and the final third will vest on February 23, 2013.
The company also announced that, as of February 1, 2010, its Compensation Committee had raised the base salaries for Duffy, Senchak, and Michaud to $400,000 each, while the base salaries for Giambrone and Kleinman increased to $325,000 each. The employment agreements run for a three-year term, but they have automatic renewal provisions (unless one of the parties notifies the other that it doesn—t want to renew the agreement).
According to the latest proxy, filed in April, 2009, the executives— new salaries give $75,000 more per year to Duffy, Senchak, and Michaud, $40,000 more to Kleinman, and $35,000 more to Giambrone. In every case, the bonus is higher than it was in 2008 (but not by that much), yet lower than it was in 2006 or 2007.
It’s true that the stock is up about 34 percent over a year ago, and the company’s total revenues (according to the 10-Q filed last November) for the nine months ending in September, 2009 were positive, compared to a net loss for the same period in 2008. Yet on page 21 of that Q, the company notes that despite some improvement and stabilization in the financial services sector in the first nine months of 2009:
——the sector remains under stress and the market stability and continuation of current trends is not certain. The valuation of certain classes of assets remains uncertain and loss reserves have been increasing reflecting continuing concerns in the credit quality of commercial real estate and personal lending and securitization markets have not broadly reopened. U.S. unemployment remains high and lenders have not widely reopened consumer and commercial credit.
In light of the raises and bonuses given to the top executives, though, apparently that uncertainty is less worrisome than it used to be.
Image source: Jon Nazca/Reuters/The Guardian U.K.