Small Print: Proxy Season's Most Outrageous Disclosures

Last Updated Jun 16, 2011 4:59 PM EDT

Many thanks to my eagle-eyed colleagues at GovernanceMetrics International for highlighting some of the year's silliest and most appalling proxy disclosures for The Corporate Library blog. These are some of my favorites.

Ascent Media Corporation's part-time CEO:

In the "nice work if you can get it" category, Ascent shareholders have 4/5 of a CEO -- which, I suppose, is better than the 3/5 they had until recently.


Mr. [William] Fitzgerald has agreed to devote no less than 80% of his business time, attention and energies to the performance of his duties as Chief Executive Officer of the Corporation. This reflects an increase from 60% in the Original Agreement.
Massey Energy's parting gift:

As the company "deals with the aftermath of a fatal mining disaster" during his tenure, departing CEO Don Blankenship is leaving with more than a gold watch. Massey shareholders are giving him a house and paying his taxes.


Under the Special Successor Development and Retention Program, Mr. Blankenship will be provided the title to a company-owned residence valued at $375,000 as a result of his retirement from the Company. We will also reimburse him for any income taxes as a result of the transfer of the residence. The table amount includes the value of the house, an additional payment of $257,111 to reimburse him for income taxes and $100 for the non-exclusive personal access to the residence through property owned by one of our subsidiaries that was granted to him upon his departure. We also granted Mr. Blankenship the option to purchase the land adjacent to the residence for cash at its appraised fair market value which is estimated to be $21,000.

Ziopharm Oncology and the mystery of the stolen goods:

Ziopharm shareholders are providing theft insurance for their CEO.


[The compensation disclosure for CEO Dr. Jonathan Lewis features] taxable perquisites including $5,016 for health club dues, $40,040 for transportation costs and $23,600 of reimbursement for the value of personal property stolen in connection with employment-based travel, and (iii) $41,521 represents "gross up" amounts reimbursed to Dr. Lewis for the payment of taxes on such perquisites.
Talbots treats the CEO like a queen:

Why should Talbots shareholders pay for the CEO's health savings account, her "housing allowance," the tax on her life insurance, and her "private carriages?"


The aggregate value of perquisites and other personal benefits for Ms. [Trudy] Sullivan in 2010 was $144,958. This amount comprised: auto allowance ($24,850), commuting and private carriages ($18,181), housing allowance ($98,537), residential security ($840), a Company contribution to Ms. Sullivan's health savings account ($300), and the par value issuance cost of restricted stock ($2,250). Ms. Sullivan received tax reimbursement on her life insurance policy ($15,272) and residential security ($602).

Leudcadia robs Peter (that would be the shareholders) to pay Paul (the executives):

Is there any possible reason the shareholders should pay a multi-million dollar life insurance premium so that the executive's heirs will not have to worry about selling the stock?


Under the Shareholders Agreement among the Company, Ian M. Cumming and Joseph S. Steinberg, as amended as of May 16, 2006 (the "Shareholders Agreement"), the Company has agreed to repurchase up to 55% of the interest of each of Messrs. Cumming and Steinberg in the common shares of the Company upon the death of each of Mr. Cumming and Mr. Steinberg. The Company will use all available proceeds from the life insurance policies held by the Company on the life of each of Messrs. Cumming and Steinberg, up to a maximum of $125,000,000, to fulfill this purchase obligation. We currently maintain insurance on the life of each of Messrs. Cumming and Steinberg in the aggregate face amount of $125,000,000 for Mr. Cumming and $117,000,000 for Mr. Steinberg for this purpose, the premiums for which aggregated approximately $2,400,000 in 2010.
Harley-Davidson pays extra for courage:

These are all fine qualities and we want to see them in our executives. But shouldn't bonuses be paid for actual results, not "drive for results?"


A participant who was a Senior Leader other than the CEO was able to earn a [bonus] payment based on individual performance relative to the following leadership behaviors: courage, creativity, accountability, drive for results, respect for others, integrity and diversity (recognizes and embraces the diverse nature of our markets, customers and employees).
Special thanks to: the GMI all-stars, especially Paul Hodgson, Dovid Muyderman, Mark Magee, Mike Gordon, Erin Enberg, Darren MacDonald, Scott Patterson, Heidi Packard, and Ashley Kotzur.
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  • Nell Minow

    Nell Minow, a member of the board of GovernanceMetrics International and founder of The Corporate Library, writes about corporate governance issues, focusing especially on CEO pay, executive compensation, shareholder rights and best business practices.You can follow her on Twitter at @nminow.

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