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Word soup in SEC filings

I know that I’m an SEC filings geek, but one of the things that endlessly fascinates me are the words that a company uses to describe when someone leaves a company? Was it a resignation? A retirement? A dismissal for cause?

I thought about this a bit as I was going through the Friday Night Dump last week. As is often the case, many companies wait until after 4 pm est on a Friday to announce any sudden departures, hoping that most people won’t notice them. But I’d argue that any time someone leaves a company quickly, absent a very specific reason, like a family health emergency, it’s worth paying closer attention to. Even if someone leaves to take a job at another company, there’s usually some advance notice or planning.

Last week, US Silica Holdings announced that its CFO for the past decade had been “terminated without cause”. While the company did issue a press release announcing this news and appointing an interim CFO, the language it used to describe the sudden departure of a longtime executive seemed unusually stark.

That same Friday Night Dump saw the sudden departure of AMC Chairman and CEO Adam Aron from the board of Norwegian Cruise Lines. As with many filings describing a sudden resignation, NCL’s filing used what I call “standard language” about there being no disagreements. Perhaps it was related to the “catfishing” incident that Aron was involved in. But as longtime readers of footnoted know, the number of times that a company talks about disagreements are few and far between. I haven’t actually tried to count them, but trust me on this: that language is very rare.

And here’s where I’ll get on my soapbox: wouldn’t it be really nice if companies were required by the SEC or NASDAQ or the NYSE to be forthright in their filings and give an actual reason why someone resigns suddenly? It’s hard to believe that Aron woke up on Oct. 19 and decided that was the day he was going to step down from a board he had served on since 2008. And, yet, that’s exactly the way that the filing is presented.

Perhaps one day there will be a bit more honestly in SEC filings. But for now, at least, filings geeks like me are left to try and parse the language and figure out what is really going on.