What else are they hiding?

October 24, 2005

Lost in the coverage of the $241,000 Savvis Communications (SVVS) Chairman and CEO Rob McCormick spent at Scores, an upscale strip club in Manhattan, was the fact that the company reported third quarter results on the same day the story broke. Hmmm…wonder which one the PR person fielded more calls on?

Although the Daily News story talked about McCormick’s history as a hard partier, I was unable to find any disclosure in the company’s SEC filings about out of control expenses for strippers. Indeed, under “all other income” last year, the company only listed a measly $6,500 for McCormick for 401-K contributions.

Also interesting in the proxy were the six-plus pages devoted to related-party transactions. For a small company whose proxy was 50 pages, that’s an awful lot. One of the new disclosures is that McCormick’s brother and sister-in-law were on the Savvis payroll. Though it’s not clear from the filing how long both have been employed by Savvis, Rob’s brother Jonathan made $210K last year and SIL Missy made $115K. So it seems like the strip club bills aren’t the only things Savvis hasn’t been particularly forthcoming on.

UPDATE It looks like Rob will now have plenty of time to think about his penchant for big-time spending. Shortly after 8 p.m. tonight, the company announced that he was on an unpaid leave of absence and that the audit committee had launched an investigation.

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