Down memory lane with Spectrum…

December 11, 2008

It’s been nearly three years since we first footnoted Spectrum Brands (SPC). At the time, it seemed like it was almost too silly to write about: a company airbrushing its 5-year performance chart, even though that sort of information was readily available even to those of us without a Bloomberg terminal. The point we were trying to make was that any company that was willing to monkey around with numbers that were relatively easy to fact-check was probably being equally creative with other numbers too. The stock has lost over 99% since that March 2006 post and our biggest regret is that we didn’t put our money where our mouth was.

Why write about this now? Because Spectrum filed its 10K late yesterday and it was chock full of goodies that seem to have no relation to reality. We’ll start with this retention agreement with CEO Kent Hussey, who’s been steering this ship since May 2007. The agreement, which was signed last month, gives Hussey $1.23 million, half of which he’ll be able to collect at the end of this month, just for sticking around. The agreement notes that the payment is being made because the board “believes that the next twelve to fifteen months will be a critical period for the future success of the Company.”

Yesterday’s filing also had proxy-related information in it and it showed that while Spectrum shareholders continued to lose money, Hussey’s salary actually increased by 28% to $775K. And there was also a wide range of goodies, including $30K for personal use of the corporate jet, $31K in financial planning advice, and an $84K tax gross-up — another number that doesn’t quite make sense, unless the financial planning advice that Hussey is receiving means he has to pay 100% in taxes.

Nearly three years later and the numbers are still not making much sense. But with the stock trading at 14 cents a share, there’s not many other places it can go.

Leave a Reply

You must be logged in to post a comment.