Right, Now Kevin Davis Buys His Own Cappuccino

NEW YORK, October 29, 2008 – MF Global Ltd. (MF), a leading broker of exchange-traded futures and options, announced the company’s board of directors has appointed Bernard W. Dan...chief executive officer, effective immediately.

Hang on. Didn’t some other guy...?

He will succeed Kevin R. Davis, who has [cough, cough] resigned from the company and its board of directors after 17 years with MF Global... “I would like to thank Kevin for the role he played in building one of the industry’s leading brokers in futures and options” blahdey-blah blah-blah-blah said Alison J. Carnwath, chairman. 

No mention of the fact that the stock, sold to you at $30 in the July 2007 IPO, put in new intraday — $1.93 — and closing — $2.25 — lows Tuesday, despite the 11 percent rampage in the broad market. So let’s take a look at ‘Transition Arrangements,’ under the inadvertently appropriate heading ‘Compensation Matters.’

• The company will pay you a transition payment of $7.5 million on the first regular payment date following the six month anniversary of your transition date. Nice. 
• Plus you get to keep 808,333 restricted stock units (or, as RSUs should be more accurately characterized, giftes from the goodnesse of the shareholder’s harte). 

Somewhat mitigated by the “Clear your desk” package being rather less costly than anticipated by the company’s proxy statement earlier this year. And the near 45 percent celebratory run-up in the stock based on some combination of Davis’s defenestration and a less-lousy-than-anticipated pre-announcement of results for Q2:(Fiscal) 2009.

 

As Churchill nearly said, “You can always count on the MF Global board to do the right thing—after they’ve tried everything else.” (Speaking of which, the company also announced that its insurers would spit up a $75 million contribution against the $76.8 million it paid to settle its role in the PAAM Scam).

Bernie Dan has a mess on his hands. But that’s not a first for him and, as an observer as astute as he is modest recently proffered (writing under an assumed name and in a different venue):  

Past performance is, as they say, no guarantee of future results. But it’s often a good clue, and Bernard W. Dan is certainly a better start than MF Global has had so far. 

The next project here involves having non-executive director (and NakedShorts reader) Bob Sloane finally stick his paw into his pocket and actually buy some stock, or at least start taking more than 25 percent of his egregriously excessive — $250,000 a year — compensation in scrip rather than used bills. It’s that ol’ alignment of interests thing.

MF Global Appoints Bernard W. Dan as CEO

MF Global press release Oct. 29 2008

MF Global Conference Call with Investors

Oct. 29 2008

MF Global Form 8K

US Securities & Exchange Commission

Oct. 29 2008

Earlier on NakedShorts:

Too expensive to axe?
Jun. 25 2008

Kevin Davis Memorial Chart du Jour

Jul. 21 2008

He’s a pretender (and good at it)

Oct. 24 2007

Disclosure: NakedShorts’ Dead Money portfolio remains long MF.

Comments

[siklewded:]

Greg - you were right. I was wrong. Knowing Bernies history. It is appropriate I'm sure everyone including kevin and Bernie saw the writing on the wall when they brought him on as COO. And I don't think Bernie would've got on board at all if he didn't believe he could turn this around. At any rate, I was pissed about my losses and took it out on you for stating the cold hard truth. I stand corrected, and will listen and learn more from you instead of putting my head in the sand.

Accept?

2008 Oct 30 09:46 PM