Like your neighborhood barber shop..
Yesterday, hair salon chain Regis (RGS) became the latest company to warn that its first quarter earnings were likely to be lower than expected because of Hurricanes Katrina and Rita. Monday was the same day that Regis filed its proxy. Coincidence? Doubtful.
Among the more interesting things in the proxy were the generous friends and families policies extended to the children of Regis executives. For example, a company run by the son of Chairman Myron Kunin, sold $685K worth of magazines to the company last year, a significant increase over last year, though slightly lower than the $714K worth of magazine Junior sold to the company in fiscal 2003 , the first year the company disclosed the arrangement.
Another company run by another son, David, who also sits on Regis’ board, sold more than $400K worth of products to the company. Meanwhile, the son of CEO and President Paul Finkelstein collected $556K in commissions for selling life insurance policies. That’s on top of the $231K the younger Finkelstein collected in fiscal 2004 and another $251K in fiscal 2003.
Now this kind of self-serving back-scratching might be perfectly OK for the neighborhood barber shop. But it’s a far different story when the company is publicly traded.