Expeditors: just don’t call it a golden parachute!

When it comes to reading SEC filings, we have to admit that there’s few companies where we can honestly say that we enjoy — perhaps even look forward — to reading what they file with the SEC. Expeditors International is one of those companies.

The first time we wrote about Expeditors, they were citing Sigmund Freud in an 8-K. Over the years, they’ve also mentioned dead frogs, John Denver’s Rocky Mountain High,  and the uselessness of the laws of the European Commission. Trust us, few companies are this entertaining when it comes to the filings.

The 8-K that they filed last week is just the latest example. While former CEO Peter Rose’s $8 million retirement package has drawn a bit of flak from some quarters and prompted shareholders to vote against the so-called “Say on Pay” proposal at the company’s annual meeting last month, the company — at least in its filings — is unapologetic.

The outspoken former CEO, who stepped down as its head in March 2014, received a compensation package for 2013 valued at $13.5 million in compensation, including about $8 million in retirement bonus. Rose was expected to remain as chairman until May 2015, but unexpectedly resigned from the board last month.

In the 8-K, the company devoted 1,265 words  to the $8 million retirement package, in an effort to explain its rationale. What caught our attention, in particular, is their issue over the use of the word “golden parachute” to describe the payment. In responding to a shareholder’s question describing the payment to Rose as a golden parachute, Expeditors takes great umbrage and goes on to explain exactly why the payment was not a golden parachute. Here’s a snip:

“After all that has been said about this issue though, we think it appropriate to add, however, that we are somewhat surprised the Mr. Rose’s retirement bonus has been repeatedly characterized as a ‘golden parachute. Mr. Rose retired and in consideration of many factors, his contributions to shareholder value being chief among them, the Compensation Committee awarded Mr. Rose a retirement bonus they felt was commensurate with his unique role as a retiring founder, and did so in an amount that was appropriate given Mr. Rose’s recent levels of compensation. That amount seemed neither excessive nor frivolous.”

The company continues on for a bit more and then adds this:

“We felt the amounts accrued for Mr. Rose would be simply considered what it in fact is, a retirement bonus from a grateful group of colleagues and managers, all of whom were either hired, trained and mentored by Mr. Rose during his 25 year tenure as CEO, and who all significantly benefited from the Company’s growth under his leadership. We don’t want to send the message that we think $8 million dollars is insignificant…and management understands that better than anyone, since they‘re actually paying it. We do think Mr. Rose’s retirement bonus was completely appropriate and, given the description of how it was derived and funded, differs from a “golden parachute” as the term has become known in the financial vernacular of the day.”

We also liked this part too:

“If one were to look at the amount of the well-publicized “golden parachutes,” while in popular definitional form, it might qualify, in substance, but it is far from the kind of abusive “golden parachute” awards that have deservedly gathered such lofty headlines. While we haven’t had the time to look, one can’t help wondering if those companies paying out these exorbitant, truly excessive, approved-in-advance, “golden parachutes,” have had proxy rating agencies suggest that their shareholders disapprove their respective compensation programs?”

The irony here is that in arguing why this was not a golden parachute, the company actually used the words “golden parachute” nine times.


Yesterday, Fusion IO announced that it was being acquired by SanDisk in a deal valued at $1.1 billion. Back in October, we put Fusion IO on our “Top Five Takeover Targets” list that we published exclusively for Pro subscribers. Here’s what we wrote at the time: “We’ve had our eye on this one for the past few months and have watched the stock drop sharply. And then, last month, when Western Digital announced that it was acquiring the privately held Virident Systems for $685 million, shares of FIO started to take off on merger speculation. This has the highest short ratio on the list – a whopping 24% as of mid-September, but we expect that number will be down sharply once the latest numbers are released and think there’s been enough interesting signals here.”