Justifiable?

May 19, 2006

When your chart looks like this, we’d imagine security for top execs might be a concern. Still, the amount of money that Cell Therapeutics (CTIC) is spending on its "corporate security program" seems more than a wee bit excessive. Unfortunately, this appears to be just the beginning of excessiveness at the company. (Full disclosure here: I own 100 shares that I’ve been too stubborn, or perhaps too stupid, to sell)

In the proxy that the company filed last Friday, the company disclosed that it had spent $2.34 million on providing President and CEO Dr. James Bianco with security over the past three years. Compare that to the $1.5 million it spent on the good doctor’s salary or the market cap of $154 million. Thankfully, the program was canceled in August 2005, but not before the company spent $216K. Equally annoying was the 45% pay increase that Bianco received at a time when investors have watched this stock tank. There was also another $220K that the company spent over the past three years on "travel and entertainment" which includes personal use of the corporate jet, something the company apparently sold in November, and another $140K on tax gross ups.

I know that I’ll be casting my votes in protest. But without real shareholder reform, it unfortunately means next to nothing.

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