How can you get this job?

March 16, 2006

Remember when Internet Capital Group (ICGE) used to be the talk of CNBC, not to mention bagel shops and nail salons? Here’s a chart to help jog your memory. Things haven’t exactly worked out so well for the company’s investors, despite a 1 for 20 split nearly two years ago. But at least one person seems to be doing well — very well — despite ICGE’s mediocre performance: director Michael Zisman.

According to the K that ICGE filed late yesterday, Zisman, who entered into a consulting contract with ICGE in August 2004, got a super-sized raise in 2005. Here’s how the company described the deal in footnote #13 (coincidence?) in the K filed yesterday. Be sure to note that they never mention Zisman’s name, which requires investors to dig through the proxy to figure out exactly who they’re talking about:

During 2004, the Company entered into a consulting arrangement with a member of the Company’s Board of Directors. The Company expensed $0.9 million and $0.2 million for the years ended December 31, 2005 and 2004, respectively, related to this consulting arrangement which is reflected in selling, general and administrative on the Company’s Consolidated Statements of Operations. At December 31, 2005 and 2004, $0.4 million and $0.2 million, respectively, are included in “Accrued expenses” on the Company’s Consolidated Balance Sheets. The Company also expensed stock-based compensation of $0.4 million in 2005 relating to this consulting agreement.

Could Zisman’s consulting services really be worth $1.7 million? And if they are, why does ICGE try to mask exactly who they’re talking about by burying it in a footnote and never mentioning Zisman’s name? But perhaps more importantly, how can you get his job?

P.S. This is my first post-vacation post and I’m still digging through lots of filings that piled up while I was away. It was really great to take a two-week break from SEC fine print, though I couldn’t have done it without the excellent help of Sandy Tilney of Norcross Enterprises and David Phillips of 10Q Detective. I hope footnoted.org readers found their posts as informative as I did. One final note: comments have been turned back on, so feel free to fire away.

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