Voting now open for worst footnote of 2009!
Each year at this time of year, we try to come up with the worst footnote of the year — the one that rises above the rest. For the past two years, in the spirit of Web 2.0, we’ve asked footnoted readers to cast their votes and this year, we’re continuing that tradition by asking readers to vote on the stinkiest disclosure of 2009.
Despite the economy being in the dumps, there was plenty of material to choose from — so much so that Sonya, Kristen and I had difficulty winnowing down the list to just five. But here’s what we’ve come up with (with the links to the actual posts):
- Martha Stewart getting a $3 million retention payment for remaining at Martha Stewart Omnimedia (MSO).
- Chesapeake Energy disclosing it spent $12.1 million to purchase Aubrey McClendon’s antique map collection.
- InfoGroup saying the cost of the yacht for former CEO Vinod Gupta was really $873,078 instead of the zero that it had previously reported.
- Freddie Mac, which took more than $50 billion in money from the government to stay afloat, giving its new CFO a $1.95 million signing bonus in addition to other goodies.
- Ross Perot Jr. asking for — and getting — a $1.1 million tax gross up after collecting over $950 million by selling Perot Systems to Dell.
You can cast your vote for the worst footnote here. Voting will remain open through Dec. 30 and we’ll post the results on Dec. 31.
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December 18th, 2009 at 12:28 pm
A $1.95 signing bonus! Huzzah for Freddie Mac’s new found modesty!
December 18th, 2009 at 5:31 pm
@kpj: Apologies: had left out the million in the item about Freddie Mac. But it was correct in the poll. Thanks to everyone who brought this to my attention. Everyone needs an editor!
December 19th, 2009 at 11:56 pm
I’m going for quantity instead of a lack of quality. Aubrey McClendon could not get it on the open market so he screwed the stockholders. Plus he will still get to view them. There doesn’t seem to be any limit to his greed.
December 21st, 2009 at 10:03 am
Through one index or fund…I own shares in all of those companies! THAT IS MY MONEY!
December 21st, 2009 at 10:05 am
Well @Grant: it looks like you’ve hit the jackpot no matter who wins this contest!
December 21st, 2009 at 2:09 pm
Aubrey in a landslide.
December 21st, 2009 at 8:24 pm
I have two nominees:
The first comes from Premier Exhibitions which has an exhibitions called “Bodies” that features real human bodies that have been plasticized. Here’s a disclosure from their latest 10-Q:
4. Goodwill and Other Intangible Assets
In the first quarter, management assessed the amount of human anatomical displays it has to exhibit and compared that amount to the estimated addressable market for such exhibitions. In management’s judgment, the Company maintained an excess capacity of human anatomical displays and is in the process of reducing the amount of capacity by negotiating a return of certain specimens. Consequently, those specimens have no future estimated cash flows associated with them and the previously capitalized and yet unamortized costs of such specimens are no longer considered recoverable; therefore, the Company recorded an impairment charge of $1.9 million to reduce the carrying value of the finite lived intangibles related to those specimens to zero. Because there was goodwill associated with the original acquisition of those specimen sets, the Company recorded an impairment charge of $2.6 million to reduce the carrying value of goodwill to zero.
So these people are not only dead, they are now impaired. I assume that their life expectancy for amortization purposes was also reduced.
The second comes from FirstData and it’s actually an 8-K. It seems the company hired a new controller and chief accounting officer. How big a signing bonus do you think is necessary to attract a quality controller in the current market? $25k? $125k? $250k? Let’s be generous and say $500k. Well here’s an excerpt from that 8-K.
On September 30, 2009, the Board of Directors of First Data Corporation (the “Company”) appointed Raymond E. Winborne, 41, as Senior Vice President and Controller of the Company. Mr. Winborne was the Senior Vice President-Finance and Controller of Delta Air Lines Inc. from April 2007 to September 2009 and served as the Senior Vice President, CFO Southeast Region for AT&T, Inc. from January 2007 to April 2007. Prior to that time, Mr. Winborne held various positions in the finance group of BellSouth Corporation from January 1999 to December 2006, most recently serving as the BellSouth’s Controller. From 1990 to 1999, Mr. Winborne was employed by the public accounting firm PricewaterhouseCoopers, LLP. Mr. Winborne will receive an annual salary of $400,000, be eligible for a target bonus of $300,000 and receive a sign-on bonus of $1.5 million.
You have to wonder how those negotiations went. Did the company offer $1 million and he talked them up to $1.5 or did he ask for $2.0 only to be forced to settle for $1.5?
December 21st, 2009 at 10:23 pm
@ Not saying: I vaguely remember seeing the item about First Data, but don’t think we ever wrote about that here, so thanks for reminding us about that one.
As for Premier, it’s been on our radar for awhile — ever since we footnoted them last spring.
December 22nd, 2009 at 12:45 pm
Naturally, here at Rivet, we think XBRL will help with footnote exhumation.
December 23rd, 2009 at 10:31 am
The run away winner has to be the natural gas exploration company buying $12.1 million for out-of-date maps from their CEO.
You’ll find Worldcom did the same type of thing for Bernie Ebbers.
December 28th, 2009 at 8:51 pm
I’m a Chesapeake stockholder who got suckered into buying the stock (with the help of PBS’s “Nightly Business Report”). where’s my antique map?…
December 30th, 2009 at 8:37 pm
This is w-a-y too hard to decide.
I vote for all of them.
December 30th, 2009 at 11:52 pm
It’s funny how the outrage over this sort of thing actually drives up the price Freddie (and other government-supported zombies) needs to pay to attract executives.
Why would an outsider with a good reputation take the risk of signing off on Freddie’s financial results? It’s a horribly complex mess and a political albatross. And it’s still a key player in propping up the mortgage market with trillions of dollars of obligations held by all sorts of central banks in addition to many US citizens’ 401ks.
Plus the job comes with the additional perk of being hated by everyone.
Oh, and the last Freddie CFO committed suicide.