Transocean’s $10m dollar footnote

Over the years, we’ve come across a lot of interesting footnotes. So many, in fact, that those warnings made over the years about running out of material in SEC filings seem almost laughable.

Whether it’s a map collection or a fishing lodge or a high school kid taking the corporate jet to class, it seems pretty unlikely that we’ll ever run out of crazy disclosures in SEC filings. And yet, a recent disclosure in Transocean’s filings seems to have raised the bar.

We first caught the disclosure in the preliminary proxy that the company filed on March 8 and shared it with our Pro subscribers. But this morning, Transocean filed its definitive proxy and we wanted to share it with the larger footnoted audience. It is, we believe, the first $10m footnote that we’ve seen in more than a decade of carefully reading the filings.

As you might imagine, you really need to pull out the magnifying glass to see the details on this one. Here’s what it looks like in the proxy:

Screen Shot 2016-03-18 at 8.14.33 AM

Can you make out the number of that footnote? It’s #9 and it directs you to a second chart that details “all other comp” which then has its own set of footnotes. That’s what we call here at footnoted, a footnote to a footnote. And in that footnote you get this disclosure:

In addition to the $370,488 identified above, Mr. Newman also received severance payments totaling $1,901,402, consistent with the terms of his separation agreement, and distribution of non-qualified retirement benefits of $7,918,564.

Mr. Newman, of course, is the former CEO of Transocean who stepped down last February. The press release at the time — which was issued on a Sunday — said that the board and Newman had “mutually agreed” to step down. Of course, there was no mention of the $10.2 million he was set to receive. On April 1 — yes, April Fool’s Day — the company disclosed some details of Newman’s separation agreement, but once again, there was no $10.2 million spelled out. Indeed, that filing suggested that he would get $1.25m in severance and salary continuance through May 31, 2015, plus some other minor benefits.

Should investors have to wait more than a year, and sift through footnotes to footnotes to get severance information on a former CEO? We certainly don’t think so.