Not exactly kicked to the curb at Assurant…
Yesterday, Assurant (AIZ) announced that it had made its interim CFO, Michael Peninger, permanent and that Peninger was replacing P. Bruce Camacho, who the release said was leaving to pursue the oft-abused “other opportunities.” As Reuters reported, there was a bit more back-story though: Camacho had been placed on administrative leave nearly two years ago, after receiving a Wells Notice from the SEC.
But it was the two additional agreements with Camacho that were part of the 8K filed yesterday that really caught my attention. The first, a separation agreement will pay the former CFO $5 million in severance over a six month period. The first payment of $833K will be due July 2. But wait….there’s more (as they say on late-night TV). Camacho will also receive $100K a month in consulting fees through next March.
So what’s the moral of this story? Be “lucky” enough to get a Wells Notice from the SEC, get placed on administrative leave, continue to collect a salary (at least according to last year’s proxy) and then get $6.2 million when you resign for personal reasons.
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Posted in Tags: 8Ks, Wells Notice |
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March 10th, 2009 at 11:53 am
True enough, but the SEC has been dragging its heels on the Wells Notices for over 20 months, and the Wells notices concern accounting issues that were incurred in 2002-2004, and disclosed in 2005. The original issues concerned finite reinsurance and a “side letter” that reduced risk to one of their reinsurers. The amounts were not material for any analyst considering buying or selling Assurant, though it seems that accounting principles were violated by the side letter.
Assurant just wants this episode to be over, as do those that received the Wells notices. The effect on the management team of Assurant was large relative to what is at stake here, which is why those receiving the Wells notices are now being normalized in some way by Assurant.
Camacho leaves. Lanmin comes back. The CEO, Bob Pollock came back in January 2008. Steinman and Folse were terminated in August 2007. Camacho leaving means that for the first time in 20 months, Assurant is operating with a permanent management team. Camacho served Assurant for a long time — management tenure at Assurant is longer than at most insurance companies, so as a shareholder, I am not bothered by the payout to Camacho.
Full disclosure: long AIZ
March 10th, 2009 at 12:20 pm
I Googled “Wells Notice” to find out what it is and thus learned something today.
This comes at the expense of an inferiority complex, however, as I assume the rest of your readership didn’t need to do this.
March 10th, 2009 at 12:31 pm
Thanks, David, for that additional (and helpful) perspective. I don’t have much insight into Assurant, but the press release and the situation definitely seemed odd to me, which is why I wrote about it.
March 10th, 2009 at 3:12 pm
Michelle’s pont is well made.
The notices were sent out for questionable practices.
Seems like anybody who was anybody got one and look what their practices got us!
The SEC issued them but did not follow up in most cases.
Usually companies did exactly what Assurant did–throw money at the problem and make it go away and the government is now buying into the problems.
Business as usual.
April 9th, 2009 at 12:40 pm
ASSURANT INSURANCE … Questionable practices …… YES for sure!!!
Web site advertises insurance for 30 to 180 days and then company continues charging you for the FULL TERM. Be VERY CAREFULL as they will not respond to a well founded appeal.