Kind of gross…

Tax gross-ups have long been one of Corporate America’s little secrets. After all, it doesn’t look so good to give away all sorts of perks and then ante up the taxes to cover the impact of giving away all those perks. But lately, companies have been disclosing a lot more about these gross-ups. Take Huntsman Corp. (HUN) which went public this past February. In the summary table filed in Huntsman’s recent proxy, the company notes that President, CEO and Director Peter Huntsman received $789K in tax gross ups in fiscal 2005. That’s the bulk of the money listed on “other annual compensation”, a catch-all phrase if ever there was one.

Of course, with 19 separate footnotes to the summary table, that’s really just the beginning. Footnote 17, for example, tells us that former divisional president Patrick Thomas received $3.9 million in “other annual comp” including 632K for tax gross ups and $3.2 million for “various severance payments”. Thomas also received nearly $50K for a housing allowance, slightly less than several other executives received for their housing allowances. Further down in the proxy, there’s a few pages of disclosure about related party transactions with various members of the Huntsman family that also makes for interesting reading, but are far too numerous to dissect in a short blog entry.

But what’s particularly disturbing is looking at these give-aways in light of Huntsman’s performance since going public in February. The stock closed on its first day at $24.50 and is currently trading at under $19.