The more things change…

December 4, 2006

hourglass.jpegThe last time we footnoted MSC Industrial (MSM), we were unclear as to why the company was spending twice as much on housing for President and CEO David Sandler in fiscal 2004 as it did in 2003. Fast forward two years to the proxy MSC filed late Friday and you see that Sandler’s apartment is now costing over $90K a year, a hefty increase over the $39K it paid for Sandler’s pad in fiscal 2003.

But that’s not the only interesting thing in MSC’s proxy. Chairman Mitchell Jacobson saw his salary increase nearly 90%, despite the fact that he gave up the CEO job in November 2005, or about three months into fiscal 2006. There’s also the 25% salary increase for Jacobson’s nephew, Erik Gershwind, who is a senior vp at the company. And let’s not forget two other real estate transactions that has a company controlled by Jacobson and his sister, Marjorie Gershwind, collecting $2 million a year for two different properties they lease back to MSC.

Finally, there’s the tad-bit optimistic five-year performance chart that the company included in the filing. As footnoted.org regulars know, any company that resorts to air-brushing their five-year performance chart, which is relatively easy to fact-check, may very well be monkeying around with numbers that are a bit more difficult to fact-check. We’ve certainly seen that before at Spectrum Brands (SPC) earlier this year.

What do all of these different threads add up to? Well, we report and you decide. But it is another indication that no matter how much things seem to change — and how many executives whine about Sarbanes-Oxley — the more things stay the same.

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