1. Remember the Neediest Executives!Imagine you're in control of a company that, after years of defending the safety of one of its key products, decides to withdraw it from the market, citing safety concerns.
|Merck's Needy Cases Fund |
Executive sweets from the makers of Vioxx
Imagine that your stock has dropped 38% as a result, erasing $39 billion from the company's market capitalization.
What do you do next?
Why, make sure your executives are well compensated in the event of a sale, of course!
At least that's what Merck ( MRK), the manufacturer of no-longer-sold pain reliever Vioxx, said it did this week.
In an SEC filing Monday, Merck said it had adopted what's called a "Change in Control Separation Benefits Plan" for 230 top executives.
Should these executives be let go within two years of any merger or acquisition of Merck, the lucky folks would win up to three years' of salary, bonus and health care benefits, among other goodies.
No word on what goodies Merck's 63,000 other employees would receive. Merck's board says it adopted the plan "in recognition of the importance to the Company and its shareholders of avoiding the distraction and loss of key management personnel that may occur in connection with rumored or actual fundamental corporate changes." To which we respond, because it was key management personnel that got Merck into its latest mess, why is it important to shareholders to keep them around?
2. Meaner Than a Junkyard FaxYou know, we used to think of Canada, Our Friendly Neighbor to the North, simply as a place where we could invest in blue-chip stocks like Biovail ( BVF), Nortel ( NT), Hollinger ( HLR) and Corel. But that's changed. Now we think of Canada simply the next-best-thing to Switzerland, as far as banking privacy is concerned. As we learned from The Globe and Mail last week, the Canadian Imperial Bank of Commerce -- better known as CIBC ( BCM) -- has had an odd system in place for what to do with paperwork associated with transferring certain investments of certain customers. It faxes a copy of those customers' sensitive personal information -- stuff like bank account numbers, home address and social insurance number -- to a junkyard owner in West Virginia. Seriously. Yes. Thanks to a phone number mixup, CIBC in 2001 started faxing copies of certain investment transfer requests to one Wade Peer in West Virginia, the G&M reported. The number of customers who suffered a privacy breach is unclear; CIBC acknowledges that 29 customers were affected, while Peer, according to the G&M, says he's received hundreds of misdirected CIBC faxes. (Peer's lawyer declined to speak with TheStreet.com or make her client available for comment.)
|Debits, Credits, Hubcaps |
CIBC's Appalachian division
3. I Have Made a Very Big Rescission, as Lou Reed Once SaidAnd this week's award for Most Pointless Securities and Exchange Commission Filing goes to ... Google ( GOOG)!
|Resistible Rescission |
Google's wishful buyback
On Monday, the company filed the rescission offer it's been discussing for a few months.
There's one little catch: Anyone who wants to take Google up on the rescission offer will have to sell shares back at the price they paid for them -- a price, Google says, that ranges from 30 cents to $80. (Google will buy options for 20% of the exercise price per share.) The weighted average price of shares and options is $3.94, says Google.
Google stock, to refresh your memory, is trading on the open market for about $180 per share. So. Imagine you've got Google shares you bought for 30 cents apiece. Do you resell them on Nasdaq at the market price, or do you sell them back to Google for 30 cents a share? Tough call. Now, we can imagine a situation in which someone who bought Google stock for $80 a share might want to sell the stock back to the company. Maybe he is restricted from selling that stock on the open market for a few years; maybe he needs a lot of cash quickly; maybe he's extremely pessimistic about Google's prospects. But for the life of us, we can't think of any reason why someone who bought stock closer to that $3.94 figure would want to sell. Actually, we can think of one reason. If you accept the rescission offer, we'll run your picture in our column next week. You'll be the lead item, we promise.
4. One Last Filing With an Old FlameThe dot-com boom is over! Over! Don't you understand? Well, of course you do. But the SEC seems to be a little slow on the uptake. On Tuesday, you see, the SEC announced it was suspending trading in the shares of Internet grocer Webvan Group and online health information company DrKoop.com, among other companies, for failure to make required periodic filings. That sort of makes sense, Webvan and DrKoop.com not making required periodic filings. You want to know why? Because both of those companies filed for bankruptcy three years ago, that's why!!! Yes, Webvan last filed a 10-Q in May 2001, while DrKoop.com last made a quarterly filing in November of that year. One would sort of think the SEC would be aware of this.
|Heady Portrait |
Would this fit on a twenty?