Letter: Deluded by Golden Oval
While watching the evening news, a story about JAL'S chief executive officer came on. JAL is a billion-dollar Japanese airline, which like most companies is having a tough time making a profit. The reaction of JAL's chief to shrinking returns was to take a pay cut down to $90,000, give up the company car, and take the bus to work. He stated it would be unethical for him not to share in the cost cutting.
The story got me wondering how Golden Oval's board and executives have reacted to the company's losses. Not quite the same.
In 2006, when Golden Oval's financial woes started to implode, our president took a salary, bonus, and benefits package of over $500,000. In 2008, that number eclipsed to $650,000.
In keeping stride with the president, the other two top managers grew their compensation packages to well north of $400,000.
Now with base salaries of $350,000 for the president and $240,000 for both the financial and operating officers, how did these three managers end up getting so much more?
Yes, in the face of ever-increasing debt, the board of directors gave the three top officers cash, perks, and stock units totaling $641,000.
I wish that was the end to this story, but the impending sale of Golden Oval to Rembrandt, Inc., opens a whole new cash flow for the executives.
Before the ink is dry on the sale's agreement, our president will get $963,259 in severance, benefits, and accelerated vesting of bonus units, the chief of finance $333,787 and finally $337,922 for the chief of operations.
But wait. There is the little issue of stock holdings.
Golden Oval's president alone has been granted 139,301 units that have a guaranteed cash value of $4.50 per unit. No such guarantee for the rank and file investors.
I'll finish up with just two more numbers: 280,071 -- that is how many more units have been created since the last SEC filing, and the price -- 0.