All that glitters…
It’s gold star Friday at Footnoted, and we thought we’d found a shiny star in this metal maker. NCI Building Systems (NCS) filed its preliminary proxy back on Tuesday, and we particularly liked this note regarding tax gross-ups:
NCI does not provide for any tax assistance or ‘gross-ups’_ for its executives. In connection with the compensation study, the Committee analyzed the potential costs of any such gross-ups, including for any excise tax potentially payable by an executive under Section 280G of the Internal Revenue Code. The consultant noted that the lack of any gross-up could potentially limit the intended benefit to the executives and that such gross-ups are common among the peer group. However, the Committee has determined that at this time the relative benefits of such a gross-up to the executive are not commensurate with the cost of the gross-up to the Company.
We like getting rid of those gross gross-ups, especially for a company that’s recently been on the slide.
NCI’s shine, however, might be coming from the golden goodbye for retiring CEO Albert R. Ginn, Jr. Ginn, who stepped down at the end of 2006, is getting a ten-year consulting agreement that will pay him an annual salary of $200,000 for each of 2008 and 2009 and of $100,000 for 2010 through 2017. That’s a lot of money in return for just 120 hours of consulting work each year! To be fair, Ginn has been in the industry for 40 years and been an executive officer of NCI for almost 10 years. Nonetheless, it just goes to show that all things glittering may not be gold stars.