Monday, January 19, 2009

Maidenform's Unflattering Governance Style!

A few posts back, I blogged about the mass exodus of Board level directors and other senior management at some companies..... almost akin to mice fleeing a sinking ship!

Look at Maidenform Brands...the Chairman of the Board resigned on January 5th 2009. Additionally, in an 8-K filed by Maidenform on Juanuary 12th, the company announced that Steven Masket resigned as EVP, General Counsel and Secretary w.e.f 3-6-09. In a subsequent 8-K filed by the company on January 16th, this seperation is termed as a 'resignation and retirement'...never heard of such a can either retire or resign...

Other than accrued salary and benefits upto his effective resignation date,Mr.Masket will also be entitled to receive payment for any unused vacation as well as executive outplacement services up to a maximum of $10,000, which will be provided for a period of not less than 3 months commencing on the Resignation Date, until Mr. Masket obtains subsequent employment or September 6, 2009 as well as payment of an amount equal to $372,395, paid in installments over a period of 12 months from the Resignation date.

In these times of mass mayoffs, zero retirement benefits is this justifiable in any way? Oh by the way, the company, like countless others, has revised is future earnings estimate.It's reported diluted EPS reduced from the earlier range of $1.17- $1.21 per share to $1.02- $1.04 per share. An additional fourth quarter restructuring costs of $0.03 per share has also been latched on to the revised estimate.This restructuring is "for a strategic workforce restructuring of 9% of corporate staff." With severance packages like the one handed out to Mr.Masket, is it any surprise that the company had to account for an extra "restructuring cost"?

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