It’s greek to me…

April 4, 2007

images-1.jpegA week and a half ago, SEC Chairman Chris Cox gave a speech at USC where he criticized what’s masquerading as disclosure under the new rules: “I have to report that we are disappointed with the lack of clarity in much of the narrative disclosure that’s been filed with the SEC so far. Based on the early returns, the average Compensation Disclosure and Analysis section isn’t anywhere close to plain English. In fact, according to objective third-party testing, most of it’s as tough to read as a Ph.D. dissertation.” Cox went on to say that some CD&A disclosures clocked in at more than 13,500 words, which he called “a far sight longer than a full-length feature in the New Yorker.”

While Cox didn’t give any specific examples during his speech, we’re quite sure that some of the language in the proxy that Tenneco (TEN) filed yesterday fits the bill:

Our compensation programs are structured to support organizational goals and priorities and stockholder interests. The committee has not in the past had, and does not currently have, a policy requiring all compensation to be deductible under Section 162(m). Amounts payable under the TAVA Plan do not qualify for the performance-based compensation exemption under Section 162(m), as the committee retains discretion in making bonus awards. In addition, the TAVA Plan was not submitted to stockholders for approval.

That was near the end of the 12 page 5,600-word CD&A — the fin de siecle, so to speak. Of course, it’s hard to imagine that anyone save Tenneco’s in-house legal team would actually make it through something like that. Or understand it.

But that wasn’t the only thing in Tenneco’s proxy. There was also this interesting non-disclosure disclosure on company paid-for perks: “Each of our executives receives a modest perquisite allowance designed to avoid any discussion regarding specific perquisites for specific individuals.” Translation? We’re now required to disclose such things as country club memberships and corporate jet usage, but we don’t want to, so we’ve decided to figure out a way around the rule.”

What investors wind up with instead is that before Mark Frissora left to run Hertz (HTZ) last July, he received $91K worth of perks. What sort of perks were they? There’s no hint in the filing, other than a mention of a $40K allowance and “gifts and the value of travel and spousal travel.”

See, it’s perfectly clear!

Leave a Reply

You must be logged in to post a comment.