Comments on: Feeling subprimal at Citi… http://www.footnoted.org/earnings-quality/feeling-subprimal-at-citi/ Michelle Leder's guide to what's hiding in SEC filings Tue, 06 Jan 2009 14:40:12 +0000 http://wordpress.org/?v=2.7 hourly 1 By: David Harper http://www.footnoted.org/earnings-quality/feeling-subprimal-at-citi/comment-page-1/#comment-3767 David Harper Tue, 06 Nov 2007 16:41:54 +0000 http://www.footnoted.org/earnings-quality/feeling-subprimal-at-citi/#comment-3767 Sure Michelle. The fred cook site is resourceful in providing compensation-related FASB/ISS interpretations (and I think the top 250 comp report is free). Fred is retired but George Paulin leads them now and he's very good. Unlike a lot of comp consultants whose job description consists of justifying higher pay, they do a good job and try to link pay to performance (I competed with them) Fred Cook @ http://www.fwcook.com/ Also, you probably already know about ISS/RiskMetrics: http://blog.riskmetrics.com/ ISS is a very important resource because they advise on proxy votes for a lot of institutional assets, so their views matter immensely. For example, their SVT metric for ten years has set the benchmark in regard to what stock option plans are advisable (for shareholder approval). Although I prefer the methods of the smaller competitor (they were doing really great until the ill-advised transaction; no matter, glass lewis is the leading edge in regard to governance, IMO) http://www.glasslewis.com/ Hope that's helpful! Sure Michelle. The fred cook site is resourceful in providing compensation-related FASB/ISS interpretations (and I think the top 250 comp report is free). Fred is retired but George Paulin leads them now and he’s very good. Unlike a lot of comp consultants whose job description consists of justifying higher pay, they do a good job and try to link pay to performance (I competed with them)

Fred Cook @ http://www.fwcook.com/

Also, you probably already know about ISS/RiskMetrics:

http://blog.riskmetrics.com/

ISS is a very important resource because they advise on proxy votes for a lot of institutional assets, so their views matter immensely. For example, their SVT metric for ten years has set the benchmark in regard to what stock option plans are advisable (for shareholder approval).

Although I prefer the methods of the smaller competitor (they were doing really great until the ill-advised transaction; no matter, glass lewis is the leading edge in regard to governance, IMO)

http://www.glasslewis.com/

Hope that’s helpful!

]]> By: Michelle Leder http://www.footnoted.org/earnings-quality/feeling-subprimal-at-citi/comment-page-1/#comment-3766 Michelle Leder Tue, 06 Nov 2007 15:09:47 +0000 http://www.footnoted.org/earnings-quality/feeling-subprimal-at-citi/#comment-3766 That's interesting about Fred Cook, David. Do you have a link to that you can post for footnoted readers? That’s interesting about Fred Cook, David. Do you have a link to that you can post for footnoted readers?

]]> By: Michelle Leder http://www.footnoted.org/earnings-quality/feeling-subprimal-at-citi/comment-page-1/#comment-3768 Michelle Leder Tue, 06 Nov 2007 06:30:39 +0000 http://www.footnoted.org/earnings-quality/feeling-subprimal-at-citi/#comment-3768 Thanks, David. Fred actually lives up the road from me -- less than a mile as the crow flies! Thanks, David. Fred actually lives up the road from me — less than a mile as the crow flies!

]]> By: David Harper http://www.footnoted.org/earnings-quality/feeling-subprimal-at-citi/comment-page-1/#comment-3758 David Harper Mon, 05 Nov 2007 20:58:19 +0000 http://www.footnoted.org/earnings-quality/feeling-subprimal-at-citi/#comment-3758 I didn't quite mean entirely as your digging reveals re: Citi. But FAS 123 took the wind out of them - already not liked by ISS etc, each add'l reload is accounted for separately. Fred Cook who pretty much invented them, just reported that NONE of his "top 250" employ them. So, not dead, but rare it seems I didn’t quite mean entirely as your digging reveals re: Citi. But FAS 123 took the wind out of them - already not liked by ISS etc, each add’l reload is accounted for separately. Fred Cook who pretty much invented them, just reported that NONE of his “top 250″ employ them. So, not dead, but rare it seems

]]> By: Michelle Leder http://www.footnoted.org/earnings-quality/feeling-subprimal-at-citi/comment-page-1/#comment-3757 Michelle Leder Mon, 05 Nov 2007 20:32:17 +0000 http://www.footnoted.org/earnings-quality/feeling-subprimal-at-citi/#comment-3757 I don't think 123 killed off reloads, at least based on a quick search I did in the filings: there's quite a few companies offering reloads, including Goodyear Tire (GT) and Alcoa (AA). But I defer to some of the accounting experts who read footnoted. As for the "big bath", that's definitely something to keep an eye on. I don’t think 123 killed off reloads, at least based on a quick search I did in the filings: there’s quite a few companies offering reloads, including Goodyear Tire (GT) and Alcoa (AA). But I defer to some of the accounting experts who read footnoted.

As for the “big bath”, that’s definitely something to keep an eye on.

]]> By: Updated: Abysmal writedowns to continue on Wall Street. -- Hoover’s Business Insight Zone http://www.footnoted.org/earnings-quality/feeling-subprimal-at-citi/comment-page-1/#comment-3752 Updated: Abysmal writedowns to continue on Wall Street. -- Hoover’s Business Insight Zone Mon, 05 Nov 2007 18:24:30 +0000 http://www.footnoted.org/earnings-quality/feeling-subprimal-at-citi/#comment-3752 [...] Michelle Leder of Footnoted: …With all of this other stuff going on, it seems interesting that Citi chose today to file its latest Q which used the word sub-prime 53 separate times in the 100-plus page filing. Compare that to 10-Q that Citi filed back in August, which only mentioned the S-word twice. Was it really not a problem worth much discussion only three months ago? [...] [...] Michelle Leder of Footnoted: …With all of this other stuff going on, it seems interesting that Citi chose today to file its latest Q which used the word sub-prime 53 separate times in the 100-plus page filing. Compare that to 10-Q that Citi filed back in August, which only mentioned the S-word twice. Was it really not a problem worth much discussion only three months ago? [...]

]]> By: David Harper http://www.footnoted.org/earnings-quality/feeling-subprimal-at-citi/comment-page-1/#comment-3750 David Harper Mon, 05 Nov 2007 16:49:10 +0000 http://www.footnoted.org/earnings-quality/feeling-subprimal-at-citi/#comment-3750 That's nice digging, Michelle. On reloads, I thought expensing (FAS 123R) killed them off in practice; since the reload grants are expensed, it's a safe bet that's an limited (executive) feature. On the bad debt reserves, my read on that it is, since it is a discretionary account (not cash), it is like "big bath accounting:" they already have large write offs, so they throw this under the rug also, where it makes little difference. So they have more room in the future, and if they overestimated the reserve, this is a clever (sneaky) way of inflating future earnings. But very interesting nuggets that don't seem to elsewhere be reported! That’s nice digging, Michelle. On reloads, I thought expensing (FAS 123R) killed them off in practice; since the reload grants are expensed, it’s a safe bet that’s an limited (executive) feature. On the bad debt reserves, my read on that it is, since it is a discretionary account (not cash), it is like “big bath accounting:” they already have large write offs, so they throw this under the rug also, where it makes little difference. So they have more room in the future, and if they overestimated the reserve, this is a clever (sneaky) way of inflating future earnings. But very interesting nuggets that don’t seem to elsewhere be reported!

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