Nice (part-time) work if you can get it…

January 26, 2012

Unemployment is still high, at 8.5%, and underemployment is rife: Plenty of people are working part-time when they’d rather have full-time jobs.

Then there are the part-time jobs pretty much anyone would love to have: corporate directorships. Earlier this month, Michelle footnoted how Google (GOOG) seems to have decided to double the value of the one-time stock grant for new directors, to $1 million, from $500,000. But in recent weeks, some other director pay arrangements have also caught our eye.

Like a lot of companies, WGL Holdings, a Washington, D.C.-area natural gas supplier, lets directors defer some of their pay, and promises to pay them interest on the deferrals. But it turns out that WGL goes further, according to the proxy it filed on Friday, guaranteeing its director a minimum of 8% interest, or, if it’s higher, the “weekly average yield to maturity for 10-year U.S. Government fixed interest rate securities issued at the time of the deferral…” For one director (Melvyn J. Estrin), that meant $89,932 in interest gains in fiscal 2011, or just over a third of his total compensation, and more than his $75,000 in stock awards for the year. It meant $48,309 for James F. Lafond, or just under a quarter of his total pay, and $30,005 for George P. Clancy, or 15% of his total compensation. (We wouldn’t mind getting rates like that on our savings — it would sure help pay the area’s higher-than-average gas bills.)

At first glance, director pay at laser-maker Coherent Inc. (COHR) looks relatively reasonable: The various annual retainers, displayed in a nice table on page 9 of its proxy, range from a base $40,000 for all board members, to $6,500 additional for governance-committee members. But it adds up fast: total compensation ranges from $258,385 for investor L. William Krause (who sits on at least four corporate boards) to $479,629 for Jay T. Flatley, CEO of aggressively independent Illumina (ILMN), who received $390,149 in stock options as part of that.

By contrast, the 8-K filed by Intermec Inc. (IN), an RFID and wireless-identification company, is something we don’t see very much: The company appears to have actually reduced what it’s paying board members. Directors will now receive restricted stock units with a grant-date value of $100,000, instead of RSUs worth $80,000 plus options valued at $80,000. Given the total pay reported in the company’s April proxy, that’s a significant change, assuming nothing offsets the cut: Last year, most of Intermec’s directors made $184,564 all-in — on the low side of what we tend to see.

Another company caught our attention with relatively low director pay — sort of. That’s TFS Financial (TFSL), a $2.9 billion market-cap thrift holding company in Cleveland, which filed a proxy on January 9 reporting annual pay of just $51,000 to $74,000 for six of its full-year directors. Of course, two new directors got $501,500 in new stock awards for joining the board, vesting over five years (or on retirement, which essentially means leaving after age 72; both are in their mid-60s).

Any way you slice it, it boils down to nice (or very nice) pay for part-time work, and we’re haven’t even seen filings from most of the outliers yet. Stay tuned.

Image source: boardroom via Shutterstock.com

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On January 18, we published our 2012 footnotedPro M&A report, naming 10 companies we see as likely deal targets based on our close reading of SEC filings. To inquire about purchasing a copy, or to find out more about subscribing to footnotedPro, where we highlight hidden opportunities and easy-t0-miss red flags well in advance of the market, please contact us.

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