The full-spin zone!

April 3, 2007

images1.jpegCommunications giant Liberty Media (LCAPA, LCAPB, LINTA, LINTB) is no stranger to spin. In fact, our head is spinning just reading through Liberty’s history of combinations and divestitures. With four different common stock issuances, it’s tough to keep track of Liberty’s comings and goings, which include investments in shopping channel QVC, travel giant IAC/Interactive (IACI), cable champ Time Warner (TWX), and Rupert Murdoch’s News Corp. (NWS). Once we finally got our balance, though, we were able to see right through a little media-style slant.

In the CD&A section of the proxy Liberty filed yesterday, the Company boasts that “we [Liberty] have elected not to offer perquisites on a general basis and believe that we offer fewer perquisites to our executives than others in our peer group of companies.” In fact, Liberty limits its perk description to reimbursement of relocation expenses, personal use of corporate aircraft, personal use of its NYC apartment, and occasional personal use of a company car.

Seems pretty reasonable, but let’s read on a bit further. Liberty also offers its Board Chairman, John Malone, an annual allowance for personal expenses. It’s not until we get to the tiny print in footnote 5 of the summary comp table that we discover the allowance covered:

(1) $60,000 of reimbursements for personal estate and tax planning advice,
(2) $48,246 of reimbursements for personal legal services,
(3) $187,596 of compensation related to personal use of corporate aircraft, and
(4) $319,278 of tax payments.

Oh, and Malone also made personal use of corporate cars and car service accounts, the New York City apartment, shipping and messenger services, and storage services. He also got reimbursed for certain personal security expenses. Total price tag? Just $666,724!

And next year? It might be a longer list in even smaller print — Liberty’s compensation committee decided to increase Malone’s annual allowance for personal expenses to a mind-spinning $1 million.

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