bloggingbuyouts

I'm a big fan of shareholder activism on the part of small investors -- communicating with management and posting on message boards to let other investors know what you think. In an interview with TheDeal.com, I said that "I really believe that the internet is already starting to and will, much more so in the future, make it easier for very small shareholders to effect change through reasoned arguments on blogs and message boards. If you think about it, you really shouldn't need to be a 13-D filer to have your concerns heard. If your ideas make sense, they should be listened to."

Posting on a Yahoo! message board, an investor posting under the handle "daleysboy" describes the corporate governance outhouse that is Lenox Group (NYSE: LNX). The entire post is worth a read, but here are some samples:

That's 23 people acting in Executive positions, with a total 2007 average cost of $484,465 per Exec, and a total expenditure of $11,142,704 in 2007. Why did Lenox need 6 CMAG consultants supporting Marc Pfefferele, with them acting in Senior Management positions? Isn't that what the "real" Senior Managers were supposed to be doing, with Mr. Pfefferele directing their efforts? Lenox paid all of these Executives $11 Million plus, to lose over $15 Million on the bottom line in 2007 . . .

If anyone looks at the data released by Lenox, plus SEC filings, they will see it strewn with info on Lenox Executives, and CMAG, regarding wage compensation, consultant fees, buying and selling of stock, cash bonuses, long-term incentives, equity incentives, performance shares, success bonuses, retirement remuneration, perquisites, option exercises, pension benefits, golden parachutes upon termination, retention bonuses, and on and on and on. It appears that someone is preoccupied with placing a lot of emphasis and effort on Executive Compensation, as compared to current and future concerns for stakeholders, employees, and customers. Who are the ones financially protected if Lenox goes belly-up? . . .

The shareholders of Lenox need a true watchdog on the Board of Directors to scrutinize Lenox's, or CMAG's, plan for success. Proxy votes at the Annual Meetings just don't cut it.

I followed the Lenox Group train wreck for awhile back in March of 2007, and I took my own shots at the company's board of directors. Given the state of the company's balance sheet and the poor prospects for its business, it's probably too late for any activist to save Lenox.

But the fact is that former CEO Susan Engel walked away with millions after engineering the acquisition that destroyed the company. Since then, board members and turnaround executives have continued the looting, leaving shareholders out in the cold.