Working from the same playbook?

November 6, 2007

images-4.jpegIt’s officially Q season, which means one thing, especially for the financial/banking companies out there: put out the earnings, do the conference call, ‘fess up to mistakes, and divert attention away from other stuff buried in the Q, while people digest the hefty losses.

Take IndyMac (IMB) for example, whose conference call is still going on now. The presentation accompanying the call can be found here. This morning, the company reported a loss of $202 million, compared with a profit of $86 million last year. Not that investors seem bothered by the news, sending the stock up over 12% so far today. Perhaps, they’re feeling bullish by some of what’s being said now, including this (I came on the call mid-stream so not sure who’s speaking now): “We’ve never been tested before this year on the biz model. This credit market has clearly challenged us and tested us like we’ve never been tested before.” Another interesting factoid? 170 mortgage companies have failed so far this year.

But what’s really puzzling to me is why the company inked a new employment agreement with CEO Michael Perry, which is in today’s Q. Just last September, the company inked this revised agreement with Perry that extended his employment through 2011. After a quick skim of the two contracts, I’m only seeing a few minor tweaks in language. All of the perks — including memberships in three country clubs — and the payment of all expenses associated with Perry’s membership and travel in the Young Presidents’ Organization. And the change in control provisions also seem to largely be the same.

So why the new contract? Especially given all the other things that IndyMac has on its plate? Clearly Perry is important to the company, but his agreement was good through 2011. If anyone has any additional clues, I’m all ears. In the meantime, I’ll be listening to the rest of the call.

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