Small Print

By Paul Hodgson – CCO and Senior Research Associate

Unfeeling Company Layoff Word of the Week

Events Team Leader Mark Magee nominated this week’s winners in the Unfeeling Company Layoff Word of the Week competition, first in a March 21 release from HP, and again in a March 208-K from Anthera. And the winner is: headcount. We’ll split the prize money.

Hewlett-Packard (HPQ) on Tuesday said that it is combining its computer and printer units to free up more cash for innovation in the rapidly evolving technology market. HP will combine its Imaging and Printing Group and its Personal Systems Group (PSG) into an entity headed by Tom Bradley, who has been PSG executive vice president since 2005. HP declined to comment when asked whether the corporate reorganization would result in a cut in its work force. “We have no specific announcements about changes to headcount at this time,” an HP spokesman told AFP.

Anthera (ANTH) has taken immediate action to decrease operating expenses through a reduction or elimination of vendor activities and immediate headcount reductions. This will result in an elimination of approximately 45% of Anthera’s headcount.

And here’s the link to the Anthera 8-K. You know, though, reading through them again, Anthera’s has a little edge on the unfeelingness, so maybe we’ll give it gold and HP silver.

There are worse places to be detained, but bravo to Brazil for demanding accountability

Events Analyst Dovid Muyderman found this Brazilian assertiveness in an International Business Times report.

Authorities in Brazil have detained 17 high-ranking executives of U.S. oil producer Chevron Corp. (NYSE: CVX) and drilling company Transocean Ltd. (NYSE: RIG) after a judge refused to let them leave the South American country pending possible criminal charges.

Transocean, wait, I remember something about that name. Ah, yes, safety bonuses. I bet they wish they hadn’t given them up to charity last year, could’ve used the extra cash for, you know, expenses.

Loan = Gift in Corporatespeak

Compensation Analyst Ashley Kotzur found this table in Wells Fargo’s latest proxy statement. 2002? When they heck are they going to start paying these “loans” back?

We currently have interest-free loans outstanding under this Relocation Program to two of our executive officers. The following table provides information about these loans as of December 31, 2011:

For a bank that is heaving families out of homes they can no longer afford because their mortgage is too high to offer interest-free loans to senior managers and to allow them to remain unpaid for up to 10 years would seem to me hypocritical at best. Then again, it’s a good job they don’t run their mortgage business like that, hardly a recipe for nice profits, is it? What must shareholders think?

Our shares are worthless so we’re not going to make you own any

Compensation Analyst Manager Scott Patterson found this piece of total doublespeak from Central Pacific Financial Corp’s latest proxy statement. Basically the bank terminated its stock ownership guidelines.

On July 27, 2005, the Board adopted stock ownership guidelines applicable to all Directors and executive officers of the Company and the Bank, which were reviewed and amended on January 30, 2008 and April 28, 2010.  The purpose of the guidelines was to define meaningful ownership level expectations for these individuals to more closely align their interests with our shareholders.  Under the guidelines, Directors and certain executives of the Company and Bank were expected to own Common Stock with a value equal to a multiple of their annual retainer or base salary, as applicable, within a specified time period.  Although many of the Company’s Directors and executives had met or made significant progress towards the ownership goals, because the guidelines are defined in terms of share value, and not as a number of shares, meeting the guidelines given the decline in our stock price proved unworkable. As a result, on January 26, 2011, the Board terminated the stock ownership guidelines.  The Company remains committed to the principles from which these guidelines were formed and continues to expect Directors and executives to maintain a meaningful stock ownership in the Company.

As Scott says: Why they couldn’t adjust the guidelines to be a number of shares rather than a value is perplexing. Let me explain how they could have done that. Go back to 2005, when the shares were still worth something, figure out how many shares each of the executives and directors would have had to buy to have a 1 X salary/retainer ownership guideline (or whatever the multiple might be) and say that owning Y number of shares it the new guideline.

I mean, this doesn’t look good to shareholders, fellas, it just doesn’t look good.