Lots and lots of reading material at Dell…
So you think your week was hectic? Dell Computer (DELL) has you beat. This week the company filed – count ’em – five 10-Qs (here and here and here and here and here), a proxy statement and last year’s 10-K. As explained in this press release, the filings contain restated financial information stretching all the way from 2003 to the first fiscal quarter of 2007.
I must say the font Dell used in these filings is easy on the eyes, and the CD&A in the proxy contains a lovely 3-D pie chart. What I’m trying to say here is: This is way too much information for one human being to comb through quickly, especially at a blogger’s pay rate. (Footnoted’s smart accounting friend, Jack Ciesielski, tackles some other issues related to the filing here.)
One thing I noticed before my eyes glazed over is that Dell plans to pay out some unusual cash compensation, totaling $113 million, when it finally files its 10-K for fiscal 2007. You see, the company has suspended stock option exercises until the 10-K gets filed, and during this suspension some options have expired. Dell’s compensation committee (which likes to call itself the Leadership Development and Compensation Committee) apparently feels sorry for the option holders and has decided to give them cash to make up for the expired options, measured by the “in-the-money value of the options at expiration.” This includes executive officers who have left the company.
Because these cash payments are in lieu of unexercised stock options, the committee won’t count them in determining someone’s regular compensation for the year.
People can debate the wisdom and fairness of this move. (Of course that’s not saying much, since people can debate anything.) Let’s at least hope none of this dough will go to anyone involved in the accounting shenanigans that created these delayed filings in the first place.