Behind the boardroom door…
It’s pretty rare that any of us get to go behind the boardroom door. That’s because minutes from board meetings are almost never included in the filings. Indeed, the only real appearance most board members make is in the proxy statement and in 8Ks when they come and go.
But that changed late Friday, when Amerisafe (AMSF) filed this 8K, which included not just the news that director Thomas W. Hallagan plans to resign when his term expires in June, but a fairly detailed memo on why. The 8K prompted Amerisafe to put out this press release before the market opened today and the stock is down about 9% on the news.
In an email sent to board members back on Jan. 14, Hallagan wrote this:
The short answer is that in the era of rampant fraud in the sub-prime market, Bernie Madoff’s fraudulent ponzi scheme, and the worst financial meltdown seen by any of us, I am concerned about functioning at Amerisafe. Since we each have fiduciary duty and personal liability, I am detailing my concerns for you to consider in your own right.
Hallagan then goes on to raise 12 points — dating back at least a year — ranging from father-son conflicts to whether the investment committee, which Hallagan headed, was “too focused on the details”. According to the proxy, Hallagan, a CPA, joined the board in May 2006 and made just over $50K in 2007 for serving on the board. The filing is a must-read, even if you don’t have any interest in Amerisafe, simply because it’s very rare to get this insiders’ view.
Of course, it’s impossible to know who’s in the right here. But at a time when it seems as if all too many board members simply rubber-stamp whatever is presented to them — collecting hefty fees in the process as a new study out this morning from The Corporate Library documents which found that average director compensation at S&P 500 companies exceeded $2 bmillion — it’s a bit refreshing to get a look behind the boardroom door.
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Posted in Tags: 8Ks, directors |
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February 9th, 2009 at 1:28 pm
Wow, that was a great find, Michelle! I hope one of my companies picks up Thomas W. Hallagan for their Boards. He seems exactly like the type of Board member you want as a shareholder. It might be worth watching where he goes in the future.
February 9th, 2009 at 3:58 pm
With respect to the comment on average director comp–you mean million? Even that seems way too high to believe…..
February 9th, 2009 at 4:05 pm
@ MarkM: Thanks for bringing that mistake to my attention, which I’ve fixed. The correct number is over $2 million for S&P 500 directors. And that number is an aggregate of all directors on the board, as opposed to individual directors who receive on average $200K. Here’s a snippet from The Corporate Library study released earlier today:
February 9th, 2009 at 5:23 pm
@ George: Agreed. It would be good if some larger companies added more people like Halllagan to their boards. But I doubt that’s likely to happen.
February 9th, 2009 at 10:37 pm
Thanks for clarifying that number. This is all so mind boggling that one barely knows b from m not cares
half the time. It’s a rip at any amount.
Loved peek into 8-K dirty linen. Emails, and esp their
father-son conflict part was just too sick, lol.
Just heard some comment-news tonight that Madoff looks to have beaten all the civil charges against him in return for some things. Maybe a confession and attempt to repay what he can? Still faces some criminal charges. Gets to stay in the $7m penthouse (til they prob kick him out).
Along with this is today’s HY Post on Madoff-Tucker team. Tucker is out $7.5b (B) as co-founder.
Operated a fund out of Conn. Big 210 acre horse farm upstate
in ritzy Saratoga NY area. Has to sell all their goodies to try and cover those losses. He’s been in news but very little big splash on this guy.
Going to make hell of movie! Short story of Tucker toys.
http://www.nypost.com/seven/02092009/business/madoff_sell_off_154171.htm
February 9th, 2009 at 11:40 pm
That kind of crap happens every day in every corporation in America. It’s all about the struggle for power which was very clearly laid out in this email. This was a text book case of control conflicts between a Board Member and the CEO. I actually don’t agree that the Halligan is above reproach here. It’s clear that he had a style difference and couldn’t find synergy with the other board members to put the CEO in check. The flip side is that the obsequiousness of the other board members is an example of how Board of Directors are suspect number one in terms of not preventing corporate fraud and abuse.
February 10th, 2009 at 11:53 am
Markopolos and Hallagan – 2012