Author: Theo Francis

Usually, after a company settles serious charges with federal prosecutors and regulators, investors can relax a little, and assume the matter is behind them. That may not be the case with one contractor we looked at more closely in a FootnotedPro report that went out to subscribers this afternoon. The company’s filings suggest an independent monitor hired to keep an eye on the company for the Justice Department has found new reason for concern.

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It’s the slow season here at the footnoted global campus: Filings are coming in at a trickle compared to the flood we saw in April and early May. Many of the ones we’re seeing are the results of recent annual meetings.

Cablevision aside, these tend to be dull affairs: Uncontested incumbents are re-elected, vague executive incentive plans are adopted, auditors are rehired, and shareholder proposals are shot down — from greenhouse gas emissions at coal company Massey Energy (MEE) to bird welfare at BJ’s Wholesale Club (BJ).

Once in a while, however, there’s a little excitement on the stockholder proposal front, and that’s what we saw earlier this week — with very different outcomes — at both Williams Cos. (WMB) and Hartford Financial Services (HIG).

At Williams Cos., shareholders passed a “say on pay” proposal — akin to one of the measures in pending congressional regulatory-reform legislation — despite stern opposition from the board and management. The final vote was 224.8 million share for, and 201.5 million shares against, or 53% to 47%, according to one of the 8-Ks the company filed yesterday. (The Tulsa World Herald got the scoop on the day of the actual meeting last week.)

The proposal, published in the April 8 proxy, was pretty straightforward:

“That the shareholders of THE WILLIAMS COMPANIES request its Board of Directors to adopt a policy that provides shareholders the opportunity at each annual meeting to vote on an advisory resolution, prepared by management, to ratify the compensation of the named-executive officers listed in the proxy statement’s Summary Compensation Table. “

It wouldn’t, the sponsor stressed up high, “affect any compensation paid or awarded any named-executive officer.” Gerald Roberts, the sponsor identified by the World Herald, who has campaigned for similar proposals for years, explained his motivation there:

“As a shareholder, I am concerned about the levels of compensation afforded our top management and members of the board of directors, who are to be independent, when the dividend seems frozen for the last two years.”

For the record, total compensation for Chairman and Chief Executive Steven J. Malcolm for last year was $9.5 million, according to the proxy’s summary compensation table.

No word from Williams Cos. on implementation, but one can imagine the board wasn’t pleased, given its invective against the original proposal. It called the proposal unnecessary and misleading, and said primly (echoing just about every other corporate rebuttal to a pay proposal that we’ve seen) that

“The Board has carefully considered this stockholder proposal and believes that the proposal is both not necessary and not in the best interests of our stockholders … [in part] because of the strong linkage between pay and performance that currently exists within our pay programs … Our pay program is structured to motivate and drive performance, emphasize long-term performance, and align our NEOs’ interests with those of long-term stockholders.”

Mind you, it’s not as if Williams Cos. shareholders were in a full-on, throw-the-bums-out revolt: The three directors on the ballot each received at least 97% of the vote, amendments to the 2007 incentive plan were approved 329 million to 35.3 million, and a proposal requesting an environmental report on some gas exploration and production business was shot down 149 million for vs. 207 million against.

Over at Hartford, meantime, another modest proposal failed, but the nays only squeaked past the yeas by a relatively slim margin: 164.5 million against vs. 152 million for, according to the 8-K it filed on Tuesday. That’s a good bit short of the 222 million it would have needed to pass (a majority of outstanding shares), but interesting nonetheless, because the proposal — from the pension plan of the big public-workers union, the American Federation of State, County and Municipal Employees — would have required the company to change its bylaws and “allow for the reimbursement of certain proxy expenses incurred in connection with a stockholder proposed director nomination.”

It would have covered proxy efforts fielding a partial slate of directors as long as at least one won a seat and the move wasn’t meant to take over the board, according to the proposal Hartford’s proxy. AFSCME added:

“In our opinion, the power of stockholders to elect directors is the most important mechanism for ensuring that corporations are managed in stockholders’ interests. … The safety valve is ineffective, however, unless there is a meaningful threat of director replacement.”

Hartford opposed it in part on the grounds that the SEC was already proposing rules that would give shareholders proxy access in certain circumstances. But really, it just didn’t like the idea:

“The AFSCME proposal would encourage an increase in contested elections, which would result in increased distraction of management from the Company’s ordinary business and could result in increased costs to the Company and its shareholders, with no showing that it is needed. “

Management and the board won the day, of course. But the strong showing by AFSCME’s supporters may lead them to perk up and take note.

Image source: Mike Licht, NotionsCapital.com via Flickr

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For a man who led his company into bankruptcy, and back out again, David C. Swanson probably won’t have to worry about solvency for while.

Swanson, of course, has been chief executive of Dex One (DEXO), the yellow-pages company previously known as R.H. Donnelley Corp., for the last eight years, and chairman for about half that time. That means he’s the same man who led the company into a voluntary bankruptcy filing last year, a development the company blamed on ongoing economic challenges in its post-emergence 10-K this spring. On the downhill slide to bankruptcy and during the restructuring, the company cut its headcount 20% in 2008 and “continued to actively manage expenses and enacted a number of initiatives to streamline operations and contain costs” in 2009, among other things freezing pension benefits for employees. The company emerged, restructured, on Jan. 29.

Now he’s stepping down, effective Friday. Described as a retirement in the 8-K that Dexo put out on Friday, it was announced just seven days before his departure date, and the same document notes that he

“will receive severance benefits to which he is entitled under his Amended and Restated Employment Agreement dated as of December 31, 2008, as amended … in connection with a termination not for Cause following a Change of Control…”

In any case, he eased out in style. According to the Separation Agreement filed with the 8-K, he’s getting a $6.45 million lump-sum cash payment, plus unspecified accrued and unpaid vacation time, and a pro-rata annual bonus for 2010. He’ll be reimbursed for the cost of getting health, dental and life insurance through as late as May 31, 2013 — a good three years.

He gets to keep his 25,230 unvested stock appreciation rights — valued at $468,521 Tuesday night — which he can exercise between March and June next year, and he’s eligible for a long-term incentive payment of as much as $3.49 million. He gets another $5.7 million payout from a special executive pension that survived the bankruptcy process, on top of the pension he’s due under the company’s plan for all employees, which was worth $1.4 million as of Dec. 31, according to the company’s latest 10-K. He also gets his deferred-compensation account balance, which was $124,014 at the end of last year (over and above the $538,230 he collected from the deferred comp plan at the beginning of 2009.)

And last but still not insignificantly, he gets payments to make up for some of his customary perks — also continuing until as late as May 2013. Those include health-club and country-club memberships ($8,340 a year), financial planning reimbursement of up to $14,700 a year, “executive health at the annual rate of $1,585″ and outplacement-services reimbursement totaling as much as $25,000.

The total haul by our calculation? As much as $17.72 million if he collects the full long-term incentive bonus and maxes out the perks, and if Dexo’s stock doesn’t change for the next year.

That would cover the bill for calling 411 to get the phone numbers of every household in New York state. Or he could let his fingers do the walking all the way to the bank.

Image source: jamiesrabbits via Flickr

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Children, fiction writers and futurists like to play various versions of “what if” — all of us do now and then; it’s part of what makes us human. But few get to make it come true in quite the same way that corporate officers sometimes can.

Anne Mulcahy got to do it late last week, for example, when she stepped down as the chairman of Xerox Corp. (XRX) after 34 years at the company; she started as a sales rep in 1976. Ursula M. Burns, the company’s chief executive, assumed the chairmanship as of May 20.

Mulcahy’s departure was effective the same day, but in at least one sense she gets to retire like it’s 2011. According to the 8-K that Xerox filed late on Friday afternoon:

“the Compensation Committee of Registrant’s Board of Directors, in accordance with the terms of the applicable agreement, accelerated the vesting of the Long Term Cash Incentive Award made to Mrs. Mulcahy on June 30, 2009 (as described in the Proxy Statement) in an amount equal to what Mrs. Mulcahy would receive had her retirement occurred on or after the July 1, 2011 original vesting date.”

In other words, retire today, get a long-term cash bonus paid as if you retired 13 months later. Assuming her departure was indeed voluntary — there’s no reason to think otherwise, but it does sometimes turn out that senior executives are asked to step down — the proxy says she would have walked away on Dec. 31 with a total of $31.4 million, including $2.6 million in non-equity incentive awards, $6.4 million from equity incentive awards and $22.4 million in pension benefits — plus another $2.6 million in accumulated deferred compensation on top of that. It’s probably safe to assume the figure last week is pretty similar. (Involuntary termination without cause would add $1 million in cash to those figures.)

One of the big recent accomplishments from Burns and Mulcahy, we’ve already observed, was the recent acquisition of Affiliated Computer Services, with the attendant 2,500 layoffs. No doubt some of them would have liked to get a check on the way out the door that looked ahead to 2011 as well.

Image source: pasukaru via Flickr

On Friday morning, we noted that the U.S. Senate had passed a bill requiring, among many other things, that candidates for corporate boards tender their resignation if they failed to get a majority of votes cast by shareholders. Little did we know at the time, but Cablevision Systems (CVC) was busily preparing to beam us a case example later in the day.

No, not some direct-to-cable snoozer on uncontested proxies. This example came via the Securities and Exchange Commission, by way of the 8-K the company filed at 4:58 p.m. Eastern time on Friday — the one giving the results of the company’s annual meeting earlier in the day.

The filing told us up front that the company’s “Class A shareholders elected all five director nominees on which they voted.” But turning to page 3, it became clear that it wasn’t quite as simple as it sounded. Here’s the table:

We’ll do the math for you: Reifenheiser, Ryan and Tese had more shares withheld than voted in their favor. None got more than 48.2% of the vote, and Tese got just 39.8%. Under the rules for any PTA election we’ve ever heard of, they would be out of a seat (and no longer eligible for the cash and stock that come with their board seats: $382,451 for Reifenheiser, $389,138 for Ryan and $228,331 for Tese).

And yet, as Cablevision indicated in the 8-K, they were indeed elected. Such is the curiosity of corporate-board elections.

The Senate bill isn’t law yet, of course. It first must be passed by the House or reconciled with the bill that chamber adopted in December, and it could face plenty of changes in the process. But what would have happened if the majority-voting provision had been in place in time for Cablevision’s annual meeting?

According to the bill text posted on the Senate Banking Committee site, all three men would have had to tender their resignation. The board would then have a choice: Accept the resignations within a “reasonable” amount of time (to be determined by the Securities and Exchange Commission) or vote unanimously to decline them. Should the board decline the resignations, it would have 30 days to “make public” its decisions, “together with a discussion of the analysis used in reaching the conclusion.”

Given Cablevision’s dual-class system, the Class A shareholders are a distinct second fiddle to their Class B counterparts. They elect separate directors — not a single Class B share went against the dozen directors they chose on Friday — and in matters in which both classes vote together, each Class B share counts as 10 Class A shares. The B shares, of course, are firmly in the hands of the Dolan family; its patriarch, Charles F. Dolan, remains chairman, and his progeny and relations are scattered throughout the upper echelons of the company. All told, our colleagues in Morningstar’s equity-research arm have observed, they have more than two-thirds of the voting power and less than a quarter of the economic interest in the company (which may help explain the nice perks we’ve previously reported).

So in the end, majority rule in the Class A vote might not have made all that much difference in the company’s governance. But at least shareholders wouldn’t find themselves represented by directors they tried to boot off the board.

Image source: public.resources.org via Flickr

Earlier this week, we looked at an unusual disclosure provision that was added to the Senate financial-regulation reform bill. But now that the Senate has passed the nearly 1,600-page legislation, with a 59-39 vote last night, it’s worth looking at some of its other, farther-reaching measures with the potential to reshape disclosure and corporate filings in coming months and years.

The House passed its own Wall Street reform bill in December, of course, and now the two chambers must reconcile the language — inevitably a horse-trade in which some measures are stripped out, others modified and, on occasion, wholly new provisions inserted. But it’s safe to say that many of the Senate’s provisions, and quite possibly most of them, will make it into law in some form, in one form or another. (Of course, the House could also simply pass the Senate bill, sending it to President Obama’s desk.)

So without further ado, culled from the bill itself as well as supporting material posted on the Senate Banking Committee website, here are some provisions likely to make waves for companies, investors, securities lawyers and the rest of us who rummage around in corporate filings:

Say on pay: Perhaps most prominently, the bill would give investors an up-or-down vote on a broader range of executive pay than they currently have, albeit a non-binding vote. Companies have resisted similar, company-specific proposals made during the existing proxy process, but we hear that some directors are cheering it on — quietly, to avoid alienating management. After all, if investors have given the thumbs-up to a pay package, it gets harder to accuse the board of feathering management’s nest.

Proxy access: Another provision could make proxy battles more routine than dramatic novelty. It would give the SEC authority to let investors nominate directors using the proxy that companies distribute, instead of forcing them to launch an expensive proxy campaign with separate mailings if they want their own candidates elected. Investor advocates call it a powerful tool to make boards more accountable to shareholders (and therefore companies as well). Managers fret about environmental or union activists winning board seats and causing a ruckus. Much may depend on how the SEC implements any new requirement, but given that a similar provision is in the House bill, expect something along these lines to wind up in the final law.

Majority voting: The bill would also require directors in uncontested elections to receive a majority of votes cast to retain their seats. At least one recent version of the bill would require defeated directors to tender their resignation — and the board to accept it, unless it votes unanimously to keep the director on and makes its explanation public. Last year, the Council of Institutional Investors says, 45 companies kept 95 directors on their boards even after they failed to win a majority of votes.

Pay & governance grab-bag: Other provisions would require compensation committees to be made up of independent directors, with the authority to hire a consultant separate from management’s. Companies restating their financials would be required to claw back incentive pay from executives that was higher than it should have been because of the errors, a provision similar to one some large companies have already begun adopting. The SEC would also have to review its compensation-disclosure requirements — among other things, requiring a 5-year comparison of executive pay to stock performance, which “may include a graphic representation of the information required to be disclosed.” A new Investment Advisory Committee would give investors a formal voice within the SEC, offering advice on regulatory practices and priorities.

Corner-office qui tam: Health-care companies and defense contractors have had to worry about whistleblower lawsuits for years, thanks to laws that give plaintiffs in successful “qui tam” lawsuits a cut of the recoveries in cases over defrauding the government. Now more companies could face similar risks under a provision that would allow those reporting securities violations to collect as much as 30% of any funds recovered, according to a bill summary posted on the Senate Banking Committee site.

Good for the gander: The banking committee’s bill summary suggests CFOs everywhere may get to experience a little schadenfreude as they prepare the 10-K each year: One provision would require the SEC to suffer through its own annual review of internal supervisory controls, and orders up a study of “SEC management” from the Government Accountability Office.

Image source: scott*eric via Flickr

The 1990s and early 2000s saw a surge of concern over “blood diamonds” and other gemstones that had been mined and exported from war-torn regions of the world, often accompanied by horrific exploitation and cost in human life. A big part of that story was pressure on the diamond industry from outside — from consumers, policymakers, filmmakers and more. Companies today go to some pains to explain their efforts to avoid these gemstones, as Tiffany & Co. did in the 10-K it filed on March 30.

Now the U.S. Senate wants companies to tell investors about crisis minerals: Less well-known materials, mined in the Democratic Republic of Congo and surrounding territory in particular, that are critical to the infrastructure of modern life. They go into everything from cell phones and computers to digital video recorders and jet engines. The Congo, of course has seen more or less steady fighting since the mid-1990s, much of it centering on the mineral–rich east of the country, where violence pervades the towns and villages near mining areas.

On Tuesday night, the Senate voted to amend the financial-regulation bill it’s debating to include a provision championed by Senators Sam Brownback (a Kansas Republican), Richard J. Durbin (an Illinois Democrat), and Russ Feingold (a Wisconsin Democrat). It would require companies to disclose their use of four minerals — columbite-tantalite, cassiterite, wolframite and gold — and to explain in their filings whether their supplies may have come from the Congo or surrounding territory. It would also require them to explain what they have done to “exercise due diligence on the source and chain of custody … to ensure they did not directly or indirectly finance or benefit armed groups in the DRC,” according to a fact-sheet distributed by supporters of the measure.

The move comes a little over a year after United Nations Security Council Resolution 1857, seeking “to ensure that companies handling minerals from the DRC exercise due diligence on their suppliers.” With 21 cosponsors now, the amendment passed by a voice-vote in the Senate, suggesting strong support — and thus a better chance that it will survive reconciliation with a House bill that lacks any similar provision, or, alternately, will resurface in some other form later on. (Despite Wednesday night’s procedural setback, the Senate seems likely to pass a regulatory-reform bill in some form over the next few weeks; Senate aides note that amendments, once made, are rarely stripped out altogether.)

Columbite-tantalite is used for semiconductors and capacitors throughout modern electronics as well as turbine blades and jet engines; cassiterite is a tin ore; and wolframite is a key source of tungsten, used in rocket nozzles, electron microscopes and tool production. Gold, the best-known of the materials on the list, has uses beyond jewelry, including high-performance electrical contacts.

As Durbin put it in his floor statement Tuesday night:

“Most people probably don’t realize that products we use every day, from automobiles to our cell phones, may use one of these minerals — and that there’s a possibility it was mined from an area of great violence… We as a nation and as consumers, as well as industry, have a responsibility to ensure that our economic activity does not support such violence.”

Cabot Corp. (CBT), which counts tantalum and columbite-tantalite among the “specialty chemicals and performance materials” it distributes, says in its late-November 10-K that it has “not purchased or sourced any material containing tantalum, including coltan, from the Democratic Republic of the Congo,” and included a similar disclaimer in its December 2008 10-K as well.

Given the ubiquity of the materials in modern life, and the fact that sources outside the Congo exist, it’s hard to say yet just which companies will be hardest-hit. But if the trajectory mirrors that of the campaign against blood diamonds, some companies will have a lot of explaining to do — and a lot to lose over time if public concern over crisis minerals becomes more widespread and the explanations prove less than satisfactory.

Image: wolframite from Wikimedia Commons

We’ve written about Wynn Resorts (WYNN) before, both in this space and elsewhere. When we do, it always seems to have something to do with cheap or free housing.

Now along comes Linda C. Chen, Wynn’s newly minted chief operating officer for Wynn Resorts (Macau) S.A. We imagine it’s a pretty glamorous job, what with the grand opening of the Encore Macau, the company’s new all-suites hotel and casino. (Read Robin Leach’s take in the Las Vegas Sun.)

So perhaps it’s no surprise that Wynn is willing to guarantee Chen a salary of at least $1.5 million a year — for 10 years. Performance reviews, Chen’s employment agreement tells us, can increase her salary, but can’t reduce it. She also gets use of a car while posted in China’s special administrative gambling region. If she’s fired without cause, she gets up to four years’ salary (which would be a minimum of $6 million).

And then there’s the house:

“Wynn Macau has agreed to purchase Ms. Chen a home in Macau costing approximately $5.4 million (US) (the “Macau House”).”

We haven’t done much house-hunting in Macau, nor do we know just which house Chen is getting, but that sounds like a pretty nice place, to judge by what’s online. Even nicer — and not mentioned in the 8-K summary that accompanied Chen’s contract when it was filed on Monday — “Wynn Macau shall provide improvements to the Macau House as approved by the President of [Worldwide Wynn],” the subsidiary of Wynn Resorts that employs Chen.

And then the truly nice part: If Chen plays her cards right, the house is hers free of charge, or awfully close to it.

If she’s fired without cause, for example, or leaves for any of a list of “good” reasons after a change in control, she gets the house for a buck. That’s $1 U.S. (Good reason, it’s worth noting, includes a reduction in her salary.)

Otherwise, she pretty much has the option to buy the house at an attractive discount to fair market value: Wynn gets the house appraised, and she gets to knock 10% off that price for each year she’s worked under her contract. Yes, if she makes it the end of the 10-year contract, that means she gets the house for nothing. Or, as the contract puts it:

“On February 25, 2020, Employee shall have the right to purchase the Macau House for the Purchase Price (defined below); provided that the Employee is still employed with Employer (it is expected that the Purchase Price on such date will be $0 (US)) …”

There is a flip side to this homey arrangement, however. If Chen is fired for cause — which includes committing a felony or “the willful destruction by Employee of the property of Employer … having a material value” — Wynn can essentially put the house to her, forcing her to buy it and deducting the cost from severance or other amounts it owes her.

Even then, she gets the 10%-a-year discount. With a deal like that — if we were the betting sort — we’d put money on Chen for the finish.

Image source: banspy via Flickr

We, and others, have had an eye on the comings and goings at CA Inc. (CA), the IT management software company in Islandia, New York. In the process, we can’t help but notice that one common denominator is the cash that keeps going to its executives, whether they’re coming or going.

On May 7, Sonya wrote about the employment agreement the company gave newly minted Chief Executive William “Bill” McCracken. But late on Friday, the company also filed its 10-K, and with it the Separation Agreement and General Claims Release it entered into on March 15 with John A. Swainson, McCracken’s predecessor as CEO.

As executive separation agreements go, it’s pretty streamlined: Six pages, 20 clauses, and $5.4 million in cash, representing double his salary plus target bonus, and then a prorated bonus for the year of termination. He also gets 18 months of health-care coverage under COBRA, a $28,004 value.

The rest of the package is harder to gauge: The agreement provides that the company will accelerate the vesting on any restricted stock that he holds that would have vested in the two years through March 15, 2012. According to the company’s last proxy, filed in July, that would include any awards under the 2008-2010 Long-Term Incentive Plan and the 2009-2011 LTIP. Just how many shares Swainson will actually hold from those programs isn’t clear; tentative figures put on them last summer totaled $2.46 million, but that includes a number of assumptions; moreover, it was 10 months ago.

Presumably Swainson also gets to keep the $2.3 million he had accumulated under the company’s deferred compensation arrangements through last year’s proxy, plus any earnings or company contributions since then.

All in all, not quite as cheery as the hello McCracken got — but it’s far from a chilly farewell.

We’ve heard of two for the price of one. It’s generally considered a good deal if you can get it. So what would you call one for the price of two?

Maybe “Barry Diller.” As chairman and chief executive of IAC/InterActiveCorp (IACI), the sprawling Internet conglomerate, and chairman and “senior executive” of Expedia (EXPE), the online travel service, Diller collected just about two of everything last year — and it made for a tidy sum indeed.

We caught a glimpse of this when Expedia filed its proxy on April 27, but we didn’t get the big picture, as it were, until IAC followed with its own proxy filing on Wednesday. We’ll cut to the chase:

• Diller’s salaries were modest by titan-of-industry standards: $965,000 combined, with $500,000 coming from IAC (despite being the smaller company, at $2.65 billion market-cap to Expedia’s $7.1 billion).
• The companies made up for that with bonuses: $3.7 million total, of which $2 million came from Expedia.
• Only Expedia awarded options last year, valued at $1.34 million.
• Diller’s total haul: $7.74 million, with IAC paying 42% and Expedia paying 58%.

But the perks really made the one-for-two special shine. Without putting both proxies side by side, you might miss the fact that Diller’s employers spent a whopping $1.7 million on his personal air travel: $991,553 at IAC and $704,262 at Expedia. And that doesn’t even include the $911,000 in personal flights that IAC says Diller paid for. (It’s not clear whether he also paid Expedia for some flights beyond those reported as income; the company doesn’t appear to disclose any such payments, however.)

The explanation is the usual one for both companies. Here’s IAC:

“Pursuant to Company policy, Mr. Diller is required to travel, both for business and personal purposes, on corporate aircraft. In addition to serving general security interests, this means of travel permits him to travel non-stop and without delay, to remain in contact with the Company while he is traveling, to change his plans quickly in the event Company business requires, and to conduct confidential Company business while flying, be it telephonically, by email or in person. These interests are similarly furthered on both business and personal flights, as Mr. Diller typically provides his services to the Company while traveling in either case. … For certain personal use of the corporate aircraft, Mr. Diller reimburses the Company at the maximum rate allowable under applicable rules of the Federal Aviation Administration.”

And here’s Expedia’s:

“Pursuant to Company policy, Mr. Diller … [is] encouraged to travel, both for business and personal purposes, on corporate aircraft. In addition to serving general security interests, this means of travel permits [him] to travel non-stop and without delay, to remain in contact with the Company while traveling, to change plans quickly in the event Company business requires, and to conduct confidential Company business while flying, be it telephonically, by email or in person. These interests are similarly furthered on both business and personal flights, as Mr. Diller … typically provide[s] services to the Company while traveling in either case.”

(We removed references to the company’s chief executive officer, who also gets free personal plane rides, from Expedia’s original language.) But we did find it interesting that IAC said Diller’s jet usage was required and at Expedia, it’s encouraged.

We hesitate to think how much time Diller spends in the air. That kind of cash could buy 98 last-minute, first-class round trips from New York’s JFK airport to Tokyo’s Narita on American Airlines (with nearly $2,500 left over for cab-fare) — and those tickets were $17,279 a pop when we checked on kayak.com early this morning. The companies also say they spent a total of $871,000 on salaries, and possibly other costs on maintaining the corporate aircraft generally — with $471,000 from IAC –but that covers business use as well as personal.

The rest of Diller’s perks are a little harder to itemize: They add up to $70,519 (61% from IAC), and include everything from personal use of third-party car services to office-space and technical support for Diller’s personal staff.

Equally intriguing may be the way Expedia and IAC have decided “to share certain expenses associated with such usage, as well as certain costs incurred by IAC in connection with the provision of certain benefits to Mr. Diller.” Expedia picks up 35%, and IAC picks up 65%. Over the course of the year, IAC says Expedia paid it $241,000 under this arrangement (Expedia pegs it at “approximately $250,000″), presumably balancing out any divergence from that split. “Expenses include costs for personal use of cars and equipment dedicated to Mr. Diller’s use and expenses relating to Mr. Diller’s support staff,” the proxy says, so there’s some overlap with the figures above.

Of course, the more we look at it, the more we realize it really is a two-for-one deal — for Diller. From that perspective, it’s not half bad.

The health-care reform bill signed by President Obama on March 23 continues to leave its (so far) modest imprint on corporate filings. A few of the sightings over the last week or so illustrates the wide range of responses by companies in different circumstances:

• Intuitive Surgical (ISRG), a surgical-equipment maker, warned in its April 20 10-Q filing that a 2.3% sales tax on medical devices in the legislation “does apply to all of the Company’s products and product candidates” and “may result in decreased profits to us, lower reimbursements by payors for our products, reduced medical procedure volumes, all of which may adversely affect our business, financial condition and results of operations, possibly materially.”
• In the 10-Q Centene Corp. (CNC) filed on Tuesday, the company bemoaned the fact that the legislation would increase competition for the company: “Subject to limited exceptions by federally approved state applications, the federal government requires that there be choices for Medicaid recipients among managed care programs. Voluntary programs, increases in the number of competitors and mandated competition may limit our ability to increase our market share.”
• Several more companies disclosed the first-quarter impact of the health-reform law’s change to the tax treatment of federal subsidies under Medicare for companies that provide prescription benefits to retirees — an issue we looked at more closely in Footnoted Pro at the beginning of this month (that report is here for subscribers). Among them: Abbott Laboratories (ABT) said in the earnings release it filed April 21 that it would take a $53 million charge for the change — or 4 cents a share, less than the $115 million, or 7-cent-a-share, charge it took for the devaluation of the Venezuelan Bolivar. Other companies reporting charges included Kimberly-Clark (KMB) at $20 million; The New York Times (NYT) at $10.9 million; PepsiCo (PEP) at $40 million; Altria Group (MO) at $12 million; United States Steel (X) at $27 million; and Johnson Controls (JCI) at $18 million.
• By contrast, AMR Corp. (AMR), the parent of American Airlines, was more equivocal, concluding in the 10-Q it filed April 21 that “the extent of [the] impact, if any, cannot be determined until regulations are promulgated.” Among other uncertainties are rules that “include the elimination of lifetime limits on retiree medical coverage.” Like AT&T, the company warned that “the Company may consider plan amendments in future periods that may have accounting implications.”
• Then there’s Microsoft (MSFT), which spent 117 words in the 10-Q it filed April 22 to conclude that:

“We do not expect any short term impact on our financial results as a result of the legislation. One provision that will impact certain companies significantly is the elimination of the tax deductibility of the Medicare Part D subsidy. This provision does not affect us as we do not provide retiree health benefits.”

Image source: Andres Rueda via Flickr.

Las Vegas has done a lot over the years to spiff up its image. But one thing it hasn’t quite been able to shake: The picture of the casino exec living large on the shareholder’s dime.

Last week we looked at MGM Mirage (MGM) and its lavish pay for lackluster performance. This week, we turn to Las Vegas Sands (LVS), where the company and its board clearly know how to sweat the small stuff — while paying out the big bucks to select high-rollers in the corner office.

Chairman and Chief Executive Sheldon G. Adelson made $5.6 million in 2009, including $1 million in cash and $1.8 million in stock options, according to the proxy the company filed on Friday. But look a little closer, and you’ll see that the biggest single chunk of his pay falls under “other compensation” — the home of perks like tax-prep assistance and personal security.

And sure enough, true to Las Vegas stereotype, security for himself and his family is the biggest chunk of that — a whopping $2.45 million. The proxy doesn’t go into detail, so we can only imagine that he has a phalanx of full-time body-guards in his entourage; at $150,000 a year for the upper end of the scale, he could keep 15 employed full-time with enough left over to buy them all sharp suits and shades.

Adelson also got “the full-time and exclusive use of an automobile and a driver of his choice,” at $163,812, “the annual reimbursement of professional fees of $100,000,” and the use of Sands-casino gyms and even dry-cleaning services — price-tag omitted, but no doubt priceless for the well-groomed gaming chief. We haven’t seen dry-cleaning mentioned as a perk since Jack Welch’s divorce proceeding.

And then there are the home repairs.

“The Company also permits its executive officers to use Company personnel for home repairs during business hours on a limited basis. The Company requires that these executives reimburse it in full for these services. There is no incremental cost to the Company for any of these benefits.”

It’s no doubt heartening to shareholders that the company can spare its workmen during business hours without losing money on the deal. But the best news for Sands executives may be that the company stands by its employees’ work. Robert G. Goldstein, Sands’ executive vice-president, had work done on his house in 2008 by a subsidiary of the company and, sadly, it wasn’t up to snuff.

“Mr. Goldstein believed, and the Company acknowledged, that some of the work was not performed in an appropriate manner. The matter was referred to an independent expert, who concurred about the quality of the work and concluded that Mr. Goldstein should not be obligated to pay the $0.4 million incurred by the Company for costs and overhead on the job. These findings have been accepted by the Company and Mr. Goldstein.”

If all this sounds like a lot of distractions for a company that styles itself the “leading global developer of integrated resorts,” not to worry: the Sands is outsourcing other non-core operations, including part of its corporate plane fleet — to its own CEO.

Sands and Adelson swapped aircraft throughout 2009, with Sands paying Interface Operations LLC — a company controlled by Adelson and his wife — some $1.2 million to rent its Boeing Business Jet, Gulfstream G-III and Gulfstream G-IV; at the same time, Interface paid Sands $652,114 to rent its three Gulfstream G-IVs, a Gulfstream G-V and two Boeing 737s. Meanwhile, Interface Bermuda Ltd., controlled by Sheldon Adelson, collected $6.1 million from Sands for the use of its two Boeing 747 aircraft. Net to Adelson entities: $7.45 million.

The more we think about it, the more it strikes us that all of Vegas’s various reputations may fit the bill: When it comes to customers’ money, what happens in Vegas sure does seem to stay in Vegas. And that new family-friendly atmosphere? It’s there all right — but it sure helps to belong to the right families.

Image source: Nevada Tumbleweed via Flickr.

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Wal-Mart Stores (WMT) brags about offering the biggest bargains on the block, but that may not apply when it comes to its own officers and directors.

Consider Executive Vice President Brian C. Cornell, who heads up Sam’s Club. The newest of the company’s top officers, he joined the company last April, and collected $668,498 in salary, a $1.3 million incentive bonus, and $10.6 million in stock, Wal-Mart’s recent proxy says. On top of that, the company also paid him $1.7 million in moving costs for relocating to Bentonville, Arkansas, where Wal-Mart is based.

We don’t know precisely where Cornell moved from, or to, but that’s one of the biggest relocation packages we’ve seen here at footnoted this season. Wal-Mart tells us it includes “payments made to him to offset a loss incurred in the sale of a residence owned by him,” but not another $28,219 to cover the cost of his lawyers while negotiating his employment package. We certainly hope most of that cost was the loss on sale of Cornell’s prior home — otherwise, Wal-Mart might want to look into a more cost-effective moving contractor. Cornell previously worked for Michael’s, the big arts-and-crafts chain based in Irving, Texas that was taken private several years ago. As far as we can tell from Google Maps, that’s about 360 miles from Wal-Mart world headquarters — and $4,772 a mile.

Meantime, Wal-Mart reimbursed Roger C. Corbett, a Wal-Mart director and and Australian bank and newspaper-company director who used to run Woolworths Ltd., taxes of $56,604 “attributable to spousal travel expenses, meals, and related activities in connection with certain Board meetings,” and for the costs themselves.

That’s more than a Wal-Mart assistant-manager makes in a year, according to Glassdoor.com, and just a hair under the $61,309 that PayScale says the company pays store managers. WakeUpWalMart.com, a site run by the United Food and Commercial Workers International Union, pegs average annual income for Wal-Mart “associates” at $19,165. (We couldn’t find clear pay figures on Wal-Mart’s Web site or in its SEC filings.)

Corbett also got $16,000 in extra pay from the company, on top of $76,000 in director’s fees and $160,000 in stock, because he’s based in Australia, and had to endure the rigors of “intercontinental travel from his residence” to attend the company’s four in-person board meetings last year. (Wal-Mart’s board also held one meeting by conference-call.)

All told, we’re beginning to understand why Wal-Mart changed its slogan a couple years back from the time-tested “Always Low Prices” to the more equivocal “Save More. Live Better.” We just hope it doesn’t apply only to company officials.

Image source: Kenneth Hynek via Flickr.

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When you walk into a casino, you should pretty much count on leaving some money behind — everyone knows the odds usually favor the house. But shouldn’t casino-company investors expect something different?

Maybe not at MGM Mirage (soon to be renamed MGM Resorts International), to judge from its latest preliminary proxy filing.

Let’s face it, 2009 wasn’t a good year for MGM Mirage, or for its shareholders: Revenue fell 17%, and MGM’s net loss widened to $1.3 billion from $855 million. Counting dividends, MGM shares handed in an abysmal total return of -33.7%, trailing the S&P 500 by 57 points and other resorts and casinos by more than 5 points. 2008 wasn’t pretty either.

Nonetheless, the champagne seems to have flowed a little faster, and the disco balls glittered more brightly, in the executive suite.

Chairman and Chief Executive James J. Murren saw his total compensation for 2009 jump to $13.75 million, from $4 million in 2008 and $6.6 million in 2007. Much of that came in the form of stock appreciation rights and options ($7.1 million), but he also got $3.4 million in cash incentive pay, a $500,000 bonus, and a $500,000 raise (bringing his salary to $2 million a year).

At this rate, the worse MGM does, the better Murren seems to do: By our calculation, Murren personally pocketed the equivalent of about 1.1% of the company’s losses last year — $1 for every $93.93 MGM lost. By contrast, in 2008, his total pay worked out to just under half of 1% of net losses. Other top execs saw their compensation rise sharply as well, by as much as 36%.

The pay came under a new contract that took effect in April 2009, just four months after he took the CEO’s job, and the bonus came “in recognition of their efforts relating to the financing of CityCenter” — the sprawling and troubled complex jointly developed by MGM and Dubai World — “as well as executing capital raising transactions that improved the Company’s financial position.”

Nor does Murren stand to suffer much if shareholders and the board decide he’s no longer playing his hand as well as he might. He already cashed out $3.5 million last year from the company’s deferred compensation plan — a sort of super-sized 401(k) arrangement sometimes described by consultants as a loan to the employer — leaving just over $65,000 behind in the company’s care. And if he’s fired, he stands to collect up to another $14.6 million in severance, including $7 million cash. (He can get a similar package if he quits after a merger.)

All of which just goes to show: Few things in life are like betting on a sure thing — unless you’re an MGM executive.

Image source: joevare via Flickr

It has been a little over two weeks since the explosion at the Upper Big Branch mine in West Virginia, which killed 29 people in the worst mining accident in 40 years. On Sunday, President Barack Obama heads to Beckley, West Virginia, for a memorial service for the miners. Last Friday, Massey Energy (MEE), which owns and operates the mine, filed its annual proxy, at 5:01 p.m.

That’s one day after the Charleston (W.Va.) Daily Mail published its conversation with Massey CEO Donald L. Blankenship, who reported that the company would pay the families of those 29 miners five times their annual pay, plus lifetime income for the widows, health insurance for 20 years or more and $5,000 a year for child-care. (Article and transcripts at the link; Massey says families don’t have to settle potential legal claims to receive benefits.) Here’s an excerpt from one of the transcripts posted by the Daily Mail:

“Blankenship: I’m always careful to say that they will be OK financially. I think that they will be OK if we get past the trauma and the other issues. They will get sizeable life insurance payments because it will be about five times their pay. They’ll get a workers comp check, and we will make up any difference between their workers comp amount per month and their straight time pay at Massey for life for widows. We will pay for childcare, I think, up to $5,000 a year for so many years. I don’t know each detail, but the life insurance, the ongoing medical coverage are a minimum of 20 years, in some cases for life. Full pay on a straight-time basis, large life insurance, the funeral expenses that you mentioned. So the benefits by any measure are very good. We’re very proud of the benefits, although we realize that doesn’t help much.”

That may seem generous, even in the face of the lawsuits that have already begun, but it’s a fraction of what Blankenship himself would be entitled to in similar circumstances. His family or heirs would have gotten $8.4 million if he had died on Dec. 31, according to the proxy.

That figure — roughly nine times Blankenship’s $933,369 salary last year — includes a $4 million cash death benefit, as well as accelerated stock awards and options. Perhaps most curiously, it also includes a “Special Successor Development and Retention Program” perk: “the title to a company-owned residence valued at $305,000,” in Sprigg, West Virginia — and $212,168 to make up for income taxes due on receiving the house. (See the post Michelle wrote a little two years ago about the house.) Massey’s investor relations contact, Roger Hendriksen, didn’t respond to questions about the death benefits sent by email.

We couldn’t immediately track down just what the house looks like, but we imagine it’s pretty nice: Searches at multiple real-estate Web sites didn’t turn up many homes on the market in Mingo County for more than about $170,000. A profile of Blankenship by Bloomberg News — which also recounts an ugly unemployment-benefit dispute with a former maid — suggests it’s located on the grounds of the company’s Rawl Sales & Processing Co., in his home county of Mingo near the Kentucky border, in Hatfield & McCoy territory.

Life insurance, of course, is often seen as a safety-net for widows and orphans, and it can certainly be just that. For those in the corner office, however, it has a tendency to morph into a sort of all-purpose perk. Blankenship’s heirs would get $4 million if he dies on the job, but when he retires — he’s 60 years old and eligible for full pension benefits at 62 — he could also choose to continue that benefit at Massey’s expense. Or, if he prefers, he can take $1.1 million cash at age 65, or $2.2 million paid out over 10 years at $18,241 a month.

All that, of course, is on top of the $5.7 million in pension benefits he is entitled to, and the $27 million he has accumulated in his deferred-compensation account.

By contrast, Massey said in a recent 8-K filing that it expects its entire second-quarter charge for the Upper Big Branch Mine tragedy to approximate $80 million to $150 million, “for charges related to the benefits being provided to the families of the fallen miners, costs associated with the rescue and recovery efforts, insurance deductibles, possible legal and other contingencies.”

Elsewhere, others have analyzed Blankenship’s pay, and how he stood to benefit from certain safety measures even as the company faced a blizzard of violations from mine-safety regulators. (The company has been fighting many of those citations and the related fines, and Blankenship told the Daily Mail that the company doesn’t put profits over safety.)

We’re glad to read that Massey seems to be making an effort to help the miners’ families, though it wouldn’t surprise us if reasonable people concluded the company should pay more. But it’s also clear that, when it comes to the company’s top executives, Massey Energy will spare no expense making sure “that they will be OK financially,” whatever happens.

Image source: public.resource.org via Flickr

Merger talk is swirling around United Airlines (UAL), with reports of a deal in the works first with US Airways (LCC) and more recently with Continental Airlines (CAL).

We’re sure there are plenty of operational reasons United’s management might be looking for a deal. But we also couldn’t help noticing that the company has made it substantially more attractive for the top officers themselves to seal a deal — in the case of Chairman and Chief Executive Glenn Tilton, more than three times as attractive as in prior years.

According to the proxy that UAL Corp., parent of United Airlines, filed at 5:25 p.m. on Tuesday, Tilton’s payout if there’s a change of control rose to $9 million last year — up nearly fourfold from the $2.4 million listed in last year’s proxy. If he loses his job within two years after a deal, his payout would be $14.3 million, up 78% from $8 million last year.

Other executives have seen similar jumps. Executive Vice President John Tague, also president of United Airlines, would see his payout in a change-of-control rise to $3.7 million, from $1.1 million. Total cost for the top five officers under a change in control scenario, even if none of them are fired: $17.6 million.

A change of control, for what it’s worth, includes

“(i) certain acquisitions by a third-party or third-parties, acting in concert, of at least a specified threshold percentage of the Company’s then outstanding voting securities; (ii) consummation of certain mergers or consolidations of the Company with any other corporation; (iii) stockholder approval of a plan of complete liquidation or dissolution of the Company; (iv) consummation of certain sales or dispositions of all or substantially all the assets of the Company; and (v) certain changes in the membership of the Company’s board of directors. “

The rise in payouts hinges not on the cash severance the executives are promised — that figure has stayed pretty steady at a little over $5 million for Tilton, for example — but in the treatment of their equity and option grants. Whereas last year, getting fired after a merger would have accelerated $2.4 million in restricted stock awards for Tilton, now it would mean $1.4 million in restricted stock, $3.2 million in stock options and $3.6 million in restricted stock units, as well as $866,667 for an additional cash bonus. (Not to worry: They’ll still get travel benefits on their airline when they go, for whatever reason — a $23,683 value for Tilton, plus a whopping $119,240 to defray taxes that would be due on the benefit.)

All that, of course, is above and beyond what they get from any merger itself, in return for the shares and options they already own outright, plus the pensions and deferred-compensation benefits they have accumulated over time.

For good measure, the company also boosted the payout executives would get outside of a change-in-control, if they are fired “without cause” — including if, say, performance isn’t up to snuff or a deal falls through. For Tilton, that figure almost doubles to $12.6 million, from the $6.6 million listed in last year’s proxy. (His everyday pay rose, too.)

If UAL ultimately does tie up with another airline, we’re sure to hear soundbites about synergy and the value that shareholders and passengers can expect from the deal. As with any merger, only time will tell how much of that value really is there.

Meantime, for UAL’s top executives, the value of a deal is there in black and white.

Image source: Deanster1983 via Flickr

We always imagine chief executives tend to be well-traveled people, flying off to power lunches and taking critical conference calls on their cell phones from the back seat of their cars.

But some corporate chieftains seem to have a little more wanderlust than others — and while the jet-setters usually get the attention, a few seem to have their wheels planted firmly on the ground. Exhibit A: Michael J. Saylor, president, chairman and CEO of MicroStrategy Inc., a McLean, Va., firm that helps other companies analyze their data.

Saylor racked up $125,615 in personal use of company vehicles in 2009 — plus another $57,800 in “alternative car services,” according to the proxy MicroStrategy filed April 16. That’s part of his total pay of $4.7 million, including cash incentive compensation of $3.35 million.

Earlier in the filing, the company provides a lengthy description of the various wheels to which Saylor is entitled:

“We provide Company-owned vehicles and a driver to Mr. Saylor. In addition to business use, we have authorized Mr. Saylor to make personal use of the company-owned vehicles and related driving services when such vehicles are not being used for business purposes, and we provide a tax gross-up for taxes he may incur as a result of this personal use. … [W]e permit him to acquire the services of one or more drivers for vehicles other than Company-owned vehicles for personal use, and we provide a tax gross-up for taxes he may incur as a result of this personal use.”

The explanation is simple: The company wants to

“enable Mr. Saylor to make more productive and efficient use of his time for Company business while he is in transit, enhance his personal security and help to preserve Company confidentiality by limiting his use of public transportation such as taxis and limousine rental services”

There’s a limit even to MicroStrategy’s automotive generosity, however. Personal use of drivers for non-company vehicles is reimbursed only up to $150,000 a year, including tax gross-ups, for Saylor and all employees and directors. There doesn’t appear to be a limit on personal use of company vehicles.

Never mind that $183,415 could buy Saylor four 2010 BMW 335 i 2D Coupes. We were curious what the company would get for that kind of cash at the rates charged by a New York City cabbie. The answer: nine round-trips from the company’s Washington, D.C.-area headquarters to Anchorage, Alaska – plus an 18.6% tip. That much traveling would amount to 211 miles a day.

Now that’s a hard-driving CEO.

Image source: Fly Navy via Flickr

UnitedHealth (UNH) CEO Stephen J. Hemsley got some ink this week for his 2009 pay package, which jumped to $8.9 million from $3.2 million, by the calculation in the company’s proxy. The Associated Press tallied it differently, but notes that UnitedHealth’s profit rose 31% to $3.8 billion even as it saw a 6% decline in enrollment for its commercial insurance business

Yet what intrigued us most about the proxy UnitedHealth filed on Wednesday was the big increase in Hemsley’s potential payout if he’s shown the door — or seeks it out himself.

If he’s fired “without cause” — ie, if he’s laid off or dismissed for poor performance — his total payout has risen 32% to $17.4 million, according to this year’s proxy, from $13.2 million in last year’s proxy. A merger or acquisition could trigger a payment of $18.7 million, up 42%, also from $13.2 million.

And if he retires, also known as walking out the door voluntarily? That now yields a cool $21.9 million, up by a third from $16.5 million last year. (The board would have some discretion over a portion of the payout in some cases.)

The biggest chunk of that is a $10.7 million payout from a special pension arrangement just for Hemsley. But that hasn’t changed since last year. Rather, the secret to the expanding severance lies in his equity awards.

According to last year’s proxy, Hemsley’s departure wouldn’t have triggered any special vesting or maturing of past restricted-stock awards or options. This year, it adds between $3 million and $5.4 million, at Dec. 31 share prices, depending on whether he were to be fired, quit or die. His potential cash severance actually declined — from $2.5 million for a generic layoff, vs. $1.3 million this year, for example — but the acceleration of equity awards more than made up for it. And at “maximum performance,” the proxy tells us, the payout would be as much as $3.5 million higher still

What changed? Two sentences on p. 42 of this year’s proxy give a hint:

“[E]quity awards granted in 2009 and going forward provide for continued vesting and exercisability for up to five years after retirement, subject to certain conditions. The Compensation Committee elected to provide such continued vesting and exercisability because such provisions are a common market practice and our other retirement benefits are limited to the Company’s 401(k) Plan and non-qualified deferred compensation plans.”

The 82-page proxy doesn’t appear to spell out just what those “certain conditions” might be, but we think that’s the law-school equivalent of, “All the other kids are doing it.”

Meantime, about those mere retirement benefits the proxy downplays: For Hemsley, the deferred-compensation plan alone is worth $6.6 million, a figure not included in his overall severance numbers.

Image source: Jack Spades via Flickr

We’ve always been fond of the term “perk,” meaning any of the many extras that companies bestow upon their top execs, from estate planning advice to free rides on the corporate jet. It always sounds so cheerful and innocent, which is certainly how companies tend to portray the perks themselves, downplaying any importance they might have in the overall compensation scheme.

Then there’s Cablevision (CVC), the cable television giant known and loved (we’re using that term generously) by its millions of customers. At Cablevision, perks are big, as its latest proxy shows us. So big, in fact, that “All Other Compensation” for Chairman Charles F. Dolan is equivalent to two-thirds of his salary, or $1.1 million. For Vice-Chairman Hank J. Ratner, it’s 88%, or $1.45 million; and for CEO James L. Dolan, it’s nearly 62%, or $1.16 million.

Total perks bill last year: $5 .2 million for the top five executives.

As in most proxies, “All Other Compensation” means anything that’s not salary, bonus, cash incentive compensation, stock or options, or certain pension and deferred-compensation gains. At Cablevision it encompasses a panoply of goodies: special executive retirement- and savings-plan benefits ($287,337 for Charles Dolan), dividends on options and stock-appreciation rights ($665,200 each for Charles and James Dolan, and $1.1 million for Ratner) and then the perks that Cablevision actually labels as perquisites: Cars and drivers for four of the five executives listed in the proxy ($123,054 for Charles Dolan) and rides on the corporate aircraft ($271,698 for Chief Operating Officer Thomas Rutledge alone, at least some of which was for commuting by helicopter).

But wait! There’s more! They also got free cable — television, high-speed Internet and phone service — as well as “executive home security” and corporate travel-service assistance in arranging personal travel. How much could those be worth? Less than $10,000 for Charles Dolan, but as much as $112,164 for James Dolan (we hope he gets more interesting channels than we do).

Clearly, a lot of what gets lumped under “perks” or “all other” compensation at companies, Cablevision included, is the kind of thing people usually pay for themselves: extras or luxuries or everyday expenses that clearly aren’t business expenses for an employer, from jet-plane rides and travel agents to high-definition living-room entertainment and the family car. Call us old-fashioned, but we always thought that’s what those big salaries were for.

After all, these gentlemen aren’t exactly paid on a shoestring. Just for signing new employment agreements late last year and early this year, Ratner got shares worth $1.75 million; Rutledge got $7.75 million cash. And each man is getting $15 million toward their deferred compensation accounts.

Still, everyone knows $15 million isn’t what it used to be. That’s something to keep in mind the next time you pay your cable bill — or cash a dividend check from Cablevision.

Image source: El Gran Dee via Flickr

We’ve seen a lot of grim disclosures about the health-care reform bill, including big charges from AT&T, Caterpillar, AK Steel and others. (Footnoted Pro subscribers can download our report on the topic from early April.)

Yet, if anyone would be excited about the new law, you’d think it would be healthcare-IT firms and electronic medical-records companies. After all, scattered throughout the bill’s 900-plus pages are numerous provisions encouraging electronic health records and related technology.

And yet, judging from language in the 10-Q it filed Thursday, Allscripts-Misys Healthcare Solutions (MDRX), the Chicago-based healthcare-IT company, isn’t so sure. True, it notes almost grudgingly that some of the law’s provisions “may have a positive impact, by expanding the use of electronic health records in certain federal programs, for example.” But others, it warns,

“may have a negative impact due to fewer available resources. Increases in fraud and abuse penalties may also adversely affect participants in the health care sector, including the Company.”

No doubt, the risks laid out in SEC filings are generally written by lawyers who try to cover every eventuality short of alien invasion. But is Allscripts really trying to tell its shareholders that it’s worried that stiffer fraud and abuse penalties may have a negative impact on the company?

Image source: mandiberg via Flickr.