Till death do us part?

October 24, 2007

images-2.jpegBearingPoint (BE) is, as the euphemism goes, facing challenges. The company, a bit of a frequent flyer here at footnoted (see here and here), has seen its stock price plunge from around $7.50 to $4.50 in the past 6 months as it struggles to catch up on its SEC filings, thanks to accounting errors dating back to 2003. (The second-quarter 10-Q showed up belatedly on Monday.) The SEC is formally investigating, shareholders are suing, and employees are leaving. The firm’s $64M loss for the quarter was inflated by big equity grants it made in an effort to retain staff.

CEO Harry You said on Monday that getting back on track with SEC reporting is a “critical inflection point” for the firm. This is, I think, Consultantspeak for “if we can’t at least get that part right, we’re screwed.” Kind of a sad situation.

It’s also sad to see a husband and wife whose careers head in opposite directions at the same company. BearingPoint’s recent proxy (which someone at the New York Times read, so I don’t have to) reported that CFO Judy Ethell got a nice 2006 bonus of 100% of salary, while other named executives made do with around 8%. Meanwhile Ethell’s hubby, Managing Director and EVP Development Robert Glatz, is leaving the company under this ‘”eparation and Release of Claims Agreement,” which was included in the 10-Q.

Judy (wife) had joined BearingPoint in July 2005; Robert (husband) showed up a month later. (Upon arrival husband was presented with 300,000 restricted stock units, which – thanks to an “administrative error” – wife did not report on Form 4 until this year.) Now wife looks secure, while husband is out of a job. To resolve any “existing or potential disputes” related to husband’s departure, the company is handing him a lump-sum $1M severance payment.

In a rather unusual clause, the agreement says Robert is specifically not barred from trying to get Judy to leave BearingPoint and work with him somewhere else. These two must love being together. At the moment, I’m feeling more optimistic about their marriage than I am about BearingPoint.

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