The late, late show…

October 17, 2005

Depending on what time you read this, Saks (SKS), the retailer that’s had more than its share of accounting woes lately, either will or has released its second quarter earnings and has or will talk about those results in a conference call. (Here’s a link to a story on the results). On Friday, sometime after the company announced its plans to announce, it snuck in a preliminary proxy that appears to be several months late.

A late filing late on a Friday afternoon has to have some interesting tidbits in it and Saks doesn’t disappoint. There’s the $7.3 million in restricted stock for Chairman and CEO R. Brad Martin, a more than 10-fold increase over fiscal 2004. Footnote #7 to the summary compensation chart notes that Martin’s 400,000 shares were granted in exchange for 1.38 million “reload” stock options and that they vested in July, after Saks stock traded above $17.50 for 20 days. Then there’s the fact that 99% of all stock options granted to employees last year went to one employee: George Jones, former president of the Saks Department store group until his resignation last month. Before leaving, Jones exercised 200,000 of those options for around $937K.

Anything else? There’s new language that defines a “change in control” as a “mandatory relocation” for Martin away from Memphis and for Vice Chairman Stephen Sadove away from New York as well as the other remaining top executives away from “their primary place of employment”. There’s also the disclosure of two of Martin’s brothers — one of whom has since resigned due to the accounting issues first disclosed in May — who have been on the company payroll. Jeffrey Martin, the company notes, is a senior vice president who performs government relations services and who received $162K last year, a substantial pay cut from the $244K he received during the previous fiscal year. In the past, the company had only disclosed feeds paid to Martin’s law firm, Shea & Gardner, which has since merged to become Goodwin Procter. Finally, there’s the three shareholder proposals that seek to make the board of directors a bit more accountable to the people who actually own the company.

Pretty standard stuff for a late filing late on a Friday.

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