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Pretty sneaky at FTI…

Reading proxy statements by the truckload is hard enough. Some companies provide too many details, hoping to drown you in footnotes. Others don’t provide enough. Throw in the fact that most of these disclosures are in Enron Beelzebub typeface and that they go on for 60 or more pages and it can get a bit exhausting.

But yesterday, we stumbled across a new trick: the non-disclosure disclosure, courtesy of consulting firm FTI’s (FCN) proxy statement. In a chart on page 62, the company gives a breakdown of the “all other compensation” figure included in the summary compensation tables. A quick skim revealed relatively modest expenses for a perk described as “club dues, memberships and season tickets”, especially given the company’s size — under $23K for President and CEO Jack B. Dunn IV. So eagle-eyed Sonya, who caught this one, was ready to move along to the next filing. But then she spotted this footnote:

The amounts in column (f) do not reflect deposits paid by us on account of golf club memberships in the aggregate net amount of $1,095,000 as of December 31, 2008.

Let’s just think about that for a moment: for whatever reason the company’s attorneys (and their compensation committee) opted to disclose the $1.1 million expense. But they did it in such a way that few people would actually find it, which seems more than a crazy coincidence. The actual disclosure — we added the bold type — was part of a much longer footnote that also mentions season tickets to the Orioles that Dunn receives. In fairness to FTI, they seem to have been doing it this way for awhile. Last year, for example, this expense — disclosed in the same way — was $705, 000, which seems like an awful lot of money for golf.

There’s also this: Gary C. Wendt the former GE executive who went on to lead Conseco (CNO) until shortly before it filed for bankruptcy and who is known for his own excesses when it comes to compensation, heads up FTI’s compensation committee. At least until he steps down from the board in early June.

But this is the real point: when a company plays sneaky with one number, there’s pretty good odds that they’re being sneaky about other numbers too.

Image Source: Dilbert/Scott Adams