Passing the baton…
Last Thursday, Fedders Corp. (FJC), which is probably best known for its air conditioners, announced that its’ current Chairman and CEO Sal Giordano, would be passing the CEO job on to his son, Michael, come October. Dad will remain executive chairman, though it’s not exactly clear whether he’ll continue to collect his $625K in salary now that he’s no longer running the show.
That same day, Fedders also filed its proxy statement and there’s an interesting footnote in the summary comp chart that also leaves one wondering about dad’s future. Last year, for example, Sal received $704K in "other annual comp". The corresponding footnote only notes that the money includes "tax reimbursement payments and certain fringe benefits" but provides no other details. Of course, that’s down from the $2.4 million the elder Giordano received in "other annual comp" in 2004 for the same vague reasons. But it’s the lack of details on this hefty pot of money — this is a stock that is trading at around $2.30 a share and has a market cap of only $72 million — that leaves one wondering whether the company will be any better off in Junior’s hands. This morning, the stock is down a whopping 13%, so the immediate reaction appears to be no.