Redemption day finally comes for Mirant?

Nearly a decade ago, I penned a short story for the now-defunct Mutual Funds magazine about a company called Mirant. The gist of the story was that while Mirant looked, smelled and was even created in the image of Enron, it was not another Enron. No siree Bob! Indeed, several analysts (whose firms had no doubt been involved in the underwriting when Mirant went public in 2001) swore that this company was different.

When Mirant filed for bankruptcy in 2003, I felt pretty guilty and often wondered how many people had bought that stock based on that short article (which I’ve been unable to find online or I would post). By then, Mutual Funds had been shuttered by Time and wasn’t yet up and running, so I had no place to give my mea culpa. But with yesterday’s news that Mirant (MIR) and RRI Energy (RRI) planned to merge, I decided to take a closer look at some of the filings.

While most of the top executives involved in the Mirant debacle — today’s Atlanta Journal-Constitution recounts the various twists and turns — that cost shareholders billions of dollars have long since moved on, the current crop of executives — several of whom were at the company in the early part of the decade — will do very well post-deal, according to the proxy that Mirant filed last month.

Chairman and CEO Edward Muller, for example, who has been at the helm since 2005, stands to make $16.6 million, the filing notes. Meanwhile, the five other top executives listed in the filing stand to collectively receive $14.2 million as a result of the change in control. A quick skim of the proxy shows that three of those other top execs, including CFO William Holden III, John O’Neal and Anne Clearly, were all part of the old Mirant — the one that essentially imploded in Enron-like fashion. Meanwhile, a quick look at Mirant’s chart post-bankruptcy shows that shareholders seem to have taken it on the chin yet again. Perhaps that’s why several attorneys are already beginning to question this deal.

Image source: Francisco DaCosta