Today at 10:59 ET Brown-Foreman (CIK – 14693) filed their proxy. I was particularly happy because we had a call scheduled at 11:30 with a potential new client and I find it keeps their attention when we can demonstrate to them an example of our processes working with real-time filings for companies that they are familiar with. Given Brown-Forman’s status as a Fortune-1000 company I was chortling to myself that this was perfect.
Unfortunately it was not as perfect as I would have liked. Soon after the filing was made I received a notification that there was a TOTAL error in the Executive Compensation table. Here is the original table.
We run several validation tests on the data as we are parsing the document – one of those is of course that the totals tie with the reported total. There are a variety of edge cases where the total may not match because of a small mistake by the registrant. One example we see is that a registrant may accidentally insert a period instead of a comma. We flag all math errors for human intervention.
In this case we can’t identify the reason for the error. The components of the 2017 compensation reported for Mr. McCallum sum up to 2,518,874. The reported total is 2,578,874.
Our next step is to scrutinize the filing to see if there is some discussion of the $60,000 amount. We couldn’t find anything so now we send off an email to their Investor Relations Department and wait for a response. If we don’t get a response within a week we will push the table as is.
These kind of addition errors happen infrequently – but then we discovered another one about half an hour later when ALJ Regional Holdings (CIK – 1438731) filed their proxy while I was on the call with the client. In this case the error was present in two years of data (2016 and 2015).
The interesting thing is that when they filed their proxy last year – the reported total for Mr. Reisch was $785,250 – which is the sum of the reported components. However, they are now reporting $804,000 as the total for 2015. Which document is correct? As with Brown-Foreman we sent off an email and so I hope we find out soon.
The potential client was impressed that we had the infrastructure to address these issues.