Lifetime Brands Inc. (NASDAQ:LCUT) designs, markets & distributes a wide array of consumer products for the home, including kitchenware, cutlery & cutting boards, bakeware & cookware, pantryware & spices, tabletop and bath accessories, which it markets under some of the better-known brands in the housewares industry. Among the brands it owns or licenses are KitchenAid and Farberware, the #1 and #2 brands in kitchen gadgets, according to the Home Furnishing Network 2005 Brand Survey. Other outstanding brands are Pfaltzgraff, Cuisinart, Sabatier, Calvin Klein, and Hoffritz.
It seems, however, that Lifetime Brands should also be known for its “lifetime employment opportunities" for family members of Jeffrey Siegel and Milton L. Cohen. Mr. Siegel, the CEO & Chairman of the Board, is the beneficial owner of 9.14% of the outstanding shares of the Company’s Common Stock, worth an estimated $34.6 million.
Milton L. Cohen was a Director of Lifetime until June 2005. As of December 31, 2005, Milton L. Cohen and his wife, Norma, beneficially owned 1,126,234 shares, or 8.66%, of the Common Stock of Lifetime Brands, Inc., worth an estimated $32.6 million (based on Friday’s closing price).
An interesting fact to pass along to our readers [jealousy!]: On December 15, 1985, Mr. Cohen exercised options for the bulk of shares currently owned at an average price of $0.27 per share. The aggregate purchase price was $469,120—and at the time Mr. Cohen only put up $46,912 of his own monies (with the Company lending him the balance due).
Jeffrey Siegel exercised 1.39 million shares at $0.27 per share, too, with similar lending terms.
Of greater interest, however, might be the geneology of the executives working at Lifetime Brands. As recently disclosed in the Company’s Schedule 14A filed with the SEC:
* Evan Miller, a son-in-law of Milton Cohen, is employed by the Company as President of Sales and Executive Vice President. His total compensation in 2005 (including salary plus bonus) was $679,727. “All other compensation,” which consisted of the value of premiums paid for split-dollar life insurance by the Company and automobile related expenses paid by the Company, totaled $12,375. Mr. Miller is also the beneficial owner of 89,783 shares of the outstanding Common Stock of Lifetime Brands, worth approximately $2.6 million.
* Craig Philips, a cousin of Jeffrey Siegel, is employed by the Company as Senior Vice-President—Distribution and Secretary and is a Director. His total compensation in 2005 was $365,623. Mr. Philips is also the beneficial owner of 814,392 shares, or 6.26%, of the outstanding Common Stock of Lifetime Brands, worth approximately $23.7 million.
* Daniel Siegel, a son of Jeffrey Siegel, is employed by the Company as a Senior Vice-President—Sales. His total compensation in 2005 was $461,553.
* James Wells, a son-in-law of Jeffrey Siegel and the husband of Tracy Wells, is employed by the Company as a Senior Vice-President—Sales. His total compensation in 2005 was $446,509. His wife, Tracy, is the beneficial owner of 706,465 shares (which includes shares held in trusts for Dan and Clifford Siegel), or 5.43%, of the outstanding Common Stock of Lifetime Brands, worth approximately $20.6 million.
* Stuart Glickman, a son-in-law of Milton Cohen, is employed by the Company as Vice President—National Sales Manager. His total compensation in 2005 was $272,693.
* Clifford Siegel, a son of Jeffrey Siegel, is employed by the Company as Vice-President—Inventory Forecasting & Replenishment. His total compensation in 2005 was $230,000.
* Scott Wit, a son-in-law of Jodie Glickman, is employed by the Company as a Regional Sales Manager. His total compensation in 2005 was $90,000.
Despite the confusion of names, the 10Q Detective was also able to ascertain through various Schedule 13D filings that Bruce Cohen, Jodie Glickman, and Laurie Miller are siblings. We bring this point to our reader’s attention because millions of additional Lifetime shares are intermingled in a web of additional trusts [not mentioned in this report] by various relations of Jeffrey Siegel and Milton Cohen. One needs a family tree just to keep track of the flow of money.
* Bruce Cohen, the son of Milton and Norma Cohen, and the beneficial owner of 5.83% of the Common Stock of Lifetime, was the erstwhile President of outlet retail stores, until his resignation last year. Mr. Cohen gave up an annual base salary of $313,603 (excluding ancillary perquisites, which totaled $12, 354 in FY 2004). Sob no tears for Bruce: On July 6, 2005, the date of his resignation, Mr. Cohen became entitled to receive a severance benefit of $313,603 payable in 26 installments through July 6, 2006.
Orlando A. Battista said: “The best inheritance a parent can give his children is a few minutes of his time each day.”
In the case of Lifetime Brands, this inheritance also seems to include a high-paying job, too.
In our opinion, the goings on at Lifetime Brands makes a mockery of the Sarbanes-Oxley Act of 2002, which was passed to provide greater oversight and accountability of financial management. Aside from the fact that Wal-Mart (NYSE:WMT) is Lifetime Brands single largest customer, accounting for approximately 20% of net sales in 2005, 10Q Detective readers have been forewarned.