Friday, November 03, 2006

The Good, the Bad and the Silly

From time to time we’ve complained about "risk factors" disclosure that degenerates into useless hand-wringing. Like geriatrics gleefully listing their ailments, some companies like to regale us with every awful scenario they can dream up. Yawn, yawn, we already know that there might be a terrorist attack, the world’s economy could tank or some CEO's brilliant strategic plan might turn out not to be.

We would however, enjoy seeing more companies mention a certain risk factor that Greenbrier Companies, Inc. (GBX) lists in its recent 10-K: "Our governing documents contain some provisions that may prevent or make more difficult an attempt to acquire us." Here they generously confess to having a staggered board of directors, a stockholder rights plan and other nifty devices designed to keep the joint from getting taken over. I find this quite commendable; while the company has presumably disclosed this stuff in bits and pieces, it's useful for investors to get it all in one place.

My giddy fling with Greenbrier, however, ended quickly when I happened to glance at President/CEO William Furman’s employment agreement. In my search for the most ridiculous contractual definition of what it takes to get fired for "Cause," Furman is the new American Idol. He only gets kicked out without his full severance package if he’s convicted of (or pleads nolo contendere to) "a felony or gross misdemeanor." But even then (and this is the kind of thing that makes a blogger want to get out of bed in the morning, though not before 9) the crime doesn’t count unless it’s "materially and demonstrably injurious to the Company" or "impairs the Executive’s ability to perform substantially the Executive’s duties." Wonderfully outrageous, and ungrammatical to boot.

First-Ever Blog Risk Factor Disclosure: This blog has only one writer. In the event she becomes temporarily overwhelmed by the unadulterated absurdity of certain people’s employment contracts, she may, without prior notice, take a week off to recover and catch up on her backlog of Lost episodes. In which case you’re on your own.