Distractions aplenty at BJ’s Wholesale Club…

March 30, 2011

We’re pretty impressed that everything seems to be going so smoothly at BJ’s Wholesale Club (BJ), at least to judge from its website — because to look at its recent SEC filings, you—d think everyone running the show was paying attention to other things.

Specifically, you—d think they were all paying attention to the finer points of their employment arrangements, and what happens if the company changes hands. See, when BJ’s filed its 10-K on Friday afternoon, the company included no fewer than 22 different employment agreements, change-in-control agreements, amendments to those documents, and similar paperwork.

By our count, it came to 117 of the entire filing’s 227 pages (albeit those skimpy SEC-length pages), or a whopping 44,462 words out of 90,318. For comparison’s sake, some measures put works of fiction over 40,000 words in the category of novel. (Novels can get a lot longer, of course: War and Peace is about 460,000 words, depending of the edition, and Proust’s â_ la recherche du temps perdu weighs in at something like 1.5 million words.)

At BJ’s, some of the amendments were fairly routine updates thanks to an end-of-year deadline for the latest chapter in the molasses-like roll-out of the 409A deferred-compensation regulations. But others were more interesting. For example, a new version of the company’s Change in Control Severance Plan and an amendment seem to drop the requirement that executives work at least 12 months before being eligible to receive a lump-sum severance payment. A bunch of the other changes tweak how individual benefit payouts are adjusted for an excise tax on big golden aprachutes.

Thus our conclusion that folks — or, at least, lawyers and executives — at the East Coast warehouse retailer are a wee bit preoccupied. And no wonder: There at the very end of the 10-K’s section on risks facing the company, is the notice that in

—February 2011, the Company announced that its Board of Directors, upon the recommendation of a committee of independent directors, has decided to explore and evaluate strategic alternatives, including a possible sale of the Company. The independent committee has engaged Morgan Stanley & Co. Inc. as its financial advisor to assist in this process.

No decisions have been made, no timetable has been set, and the filing goes on to say shareholders shouldn’t expect any updates, either. For our part, we couldn—t help but notice that the warning was topped by this italicized heading:

—There are Uncertainties Introduced by Our Announcement to Explore and Evaluate Strategic Alternatives

For shareholders, true enough. But fewer, it would now seem, for the company’s executives.

Image source: BJ’s Warehouse Club Inner Circle membership page

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