Dear Martha Stewart…

April 3, 2009

We don’t normally write posts in letter format. But we were inspired to do so by the two letters that Martha Stewart Omnimedia (MSO) added to its recent proxy statement. The letters — one from Executive Chairman Charles Koppelman, Co-CEOs Wenda Harris Millard and Robin Marino and a second from Martha Stewart — were so optimistic, and so contrary to what shareholders have seen from the company over the past year that we decided to take a whack at it. So here goes:

Dear Charles, Wenda, Robin and Martha:

We’re glad you think that Martha Stewart Ominmedia “had a solid year in 2008” as you note in your letter. While we understand your optimism, we have to ask: what planet are you living on? Granted the stock has bounced back a little bit recently, but it still remains at historical lows, which doesn’t exactly seem like a “good thing” to use Martha’s own favorite phrase.

Yet, we couldn’t help but notice that while shareholders have been fed lots of empty promises and a good helping of happy talk, at least two of you appear to be feasting at the company trough. Charles’ $2.1 million in other compensation, the bulk of it fees paid to CAK Consulting, leaves us scratching our heads. So too does the $3.5 million paid to Martha Stewart. While we were aware of the $2 million fee to use Martha Stewart’s various homes, the additional $1.25 million in “make whole” payments caught us by surprise.

And while we’re on the subject, what’s with employing the extended family? We obviously know about the radio show that features Martha’s daughter Alexis and Koppelman’s daughter, Jennifer (though we’re not quite sure why the two women aren’t paid the same salary). But does Martha really need to employ your sister-in-law and your sister too?

We could go on to counter some of the other happy-talk in your respective letters, but we’ll stop here. In closing won’t you please take a cue from your latest acquisition, Emeril Legasse, and take your corporate governance up a notch (or five)? All of this self-dealing leaves us with a very bitter taste in our mouth.

Sincerely,

Your shareholders

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