Alloy Q2: Revenue Down But CEO Diamond Gets Millions in Stock Awards

(MoneyWatch)  Revenue is down at Alloy Media + Marketing, the agency that brought us Gossip Girl, but CEO Matthew Diamond is still getting his stock bonuses, according to an SEC filing. Q2 2009 revenue at Alloy was flat at $54 million; net income was $2 million, up from a loss of $1.4 million the year before. However, six month revenue is down 6 percent to $97 million.

A few days before the results were filed with the SEC, Diamond was granted 224,031 shares of restricted Alloy stock and 234,235 stock options (click to enlarge):

The stock and options vest in chunks now through 2012. The options vest at $6.35, meaning they're already in the money as Alloy was at $6.65 at the time of writing. The restricted stock is currently worth about $1.5 million, assuming no change in the price (of course, the value of both stock and options changes over time).

In addition, Alloy also described the current executive compensation arrangements for Diamond and his team:

This table indicates that Diamond will receive about $3.4 million in compensation for 2009, which includes bonuses he earned in 2008. Last year he earned a total of $1.3 million in compensation. Here's the filing from the recent proxy report:

Diamond's chat with investors was a brief one, as only two analysts phoned in to hear it (hello Julian Allen of Spitfire Capital and P. J. Solit of Potomac Capital!). On that call, Diamond noted an irony of his business. Although his agency is a young one and focuses on young people, its staff are getting older and -- because of the benefits accruing with seniority -- more expensive:

We also strive to keep our corporate costs low, however, this year they have increased 29% versus last year's first six months. Almost all of this is due to increases in benefit-related costs. In our history we have been lucky to have low benefit costs compared with most other companies, however, as our workforce ages, we are starting to see these costs increase.

As a way to combat these rising costs we plan on a vigorous benefits negotiation later this year and we will continue to be conservative in hiring additional employees. However, it is unlikely that we will be able to achieve the same low benefit costs as in past years.

• See BNET's previous network efficiency ranking:
• BNET Ranking Shows Agency Network Efficiency in Decline Despite Layoffs
• Recession Arrives at Alloy, the Agency Behind "Gossip Girl"
• Alloy Media + Marketing Details Top Execs' Cash Bonuses
• ValueClick Tops BNET's Network Efficiency Ranking; Interpublic Comes Last
• Valassis Tops BNET's Network Efficiency Ranking; Interpublic Comes Last
• Alloy, Aegis Top BNET's Network Efficiency Ranking; WPP Slips
• Alloy Beats WPP, IPG et al in Network Efficiency Ranking