Paying for failure at First Marblehead…

First Marblehead (FMD) first caught our attention nearly two years ago after dropping from the mid-50s to around $30 a share. Over the past two years, we’ve caught a few other items (see here and here) as the stock has moved from $30 to under $3.

But nothing quite prepared us for the proxy that they filed yesterday which detailed hefty severance payments for some of the very executives who have been responsible for this train-wreck, including former CEO Jack Kopnisky, who stepped down at the end of last August. According to the proxy, Kopnisky got $516K in severance and another $9,000 to reimburse him for parking expenses, which even in Boston, seems awfully high to park a car.

Former CFO John Hupalo, who resigned about a month later after two years on the job, got $566K in severance and former Chief Administrative Officer Anne Bowen got $378K in severance. Finally, the former Chief Marketing Officer, Greg Johnson, got $226K in severance.

All told, that adds up to $1.7 million in severance for four executives who were front and center for this incredible destruction of shareholder value.

Posted in My big fat deal Tags: proxy

3 Comments »

3 Responses to “Paying for failure at First Marblehead…”

1. Frank Graham Says:
   September 29th, 2009 at 10:43 am

   Yowie! Sure gives new meaning to Marblehead like Rockhead. And on 9.23 just after
   close came a 8-K about percentages for 2010 pool.
   The Subcommittee, which administers the Incentive Plan, has designated three classes of employees as covered employees under the Incentive Plan for Fiscal 2010: one class will be comprised of any employee holding the title of Chief Executive Officer as of June 30, 2010, one class will be comprised of any employee holding the title of Chairman as of June 30, 2010 and one class will be comprised of all employees holding the title of Managing Director as of June 30, 2010.

   The incentive pool for Fiscal 2010 will be five percent of the Corporation’s income from operations for Fiscal 2010 (“Operating Income”). In the event that the Corporation’s Operating Income equals or exceeds $10.0 million, the incentive pool will be allocated to the three classes of covered employees in accordance with the following percentages:

   http://xml.10kwizard.com/filing_raw.php?repo=tenk&ipage=6525122

2. Brad Says:
   September 29th, 2009 at 6:18 pm

   Another way to look at it is: these guys are toxic, let’s pay them a lot to leave.

3. ComradeAnon Says:
   October 1st, 2009 at 4:34 pm

   HD still says all that severence they paid Nardelli was the best money they ever spent.