Beach reading…

July 17, 2006

With temperatures here in New York heading well into the 90s over the next few days, it’s time to head out to the beach with a good book. And while the preliminary proxy that Cendant (CD) filed late Friday may not be everybody’s idea of beach reading, it had many of the elements of a juicy novel. For one, there was lots of money: Chairman and CEO Henry Silverman exercised $117 million worth of options last year. That was on top of a salary and bonus of $15.6 million and a curiously named "insurance arrangement" worth another $5.65 million that the company tried to explain in a poorly worded footnote: "Amounts reflect benefits relating to supplemental life insurance. For Mr. Silverman, the amount represents premiums paid by the Company under Mr. Silverman’s insurance arrangement." That should make for an interesting plot-line with the two shareholders who filed resolutions challenging Cendant’s pay practices, especially given Cendant’s performance during the period in question.

There was also some interesting tidbits about the amount of money that the company — whose businesses include real estate and relocation services — spent providing similar services to two of its executives. CFO Ronald Nelson received $667K — only $100K less than his 2005 salary — to cover relocation and tax preparation services. And Chief Administrative Officer Linda Coughlin got Cendant to pony up $1.75 million to buy her house in May 2005. Though the company doesn’t say where the house is located, given the date of the sale — right around the time that real estate values were peaking — means that Cendant shareholders probably didn’t fare so well on that deal.

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