The Numbers Don’t Add Up!

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.

brownForman

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.

additionProblem

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).

additionProblem2

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.

Where is that Comp Data?

One of the things we pride ourselves on is what we think is the fastest and most comprehensive delivery of Executive and Director Compensation data on the planet (a little bit of hyperbole never hurts).  In an attempt to focus on that we have been working to add a modal window on our website so that a user who visits our prime website will see the most recent comp table we have processed.

I had an interesting question the other day from a visitor who wondered why we were displaying the compensation data from SPRINT in the middle of the day on 6/20 when four other issuers had reported EC data since Sprint filed their proxy at 5:00 pm on 6/19.  If we were so good where was that comp data?

Here is the sequence of filings:

sprint

So when I received the query early on the 20th I had to look.  We deliberately did not push out the DC/EC or Audit Fee data for those entities because of an interesting issue.  MITCHAM INDUSTRIES and DOCUMENT SECURITY SYSTEMS INC  both filed a 10-K a couple of months earlier and both reported that data in their 10-Ks so our system flagged the new data as \SAME CONTENT\DIFFERENT DOCUMENT.

Here is the EC table from MITCHAM INDUSTRIES as reported in their 10-K on 5/31:

10-K

Here is the EC table from their Proxy filed on 6/20:

proxy

Here is the data from their 10-K after we normalized it and made it available on 5/31:

mitcham

Further FUNDVANTAGE TRUST’s and CHROMADEX CORP’s DEF 14A related to a Special Meeting and did not include summary compensation data.  It was not until SPEEDEMISSIONS INC filed their proxy at 10:20 (CT) before we had new data.

We ultimately do not replace the existing data with the new data if it matches the content from a previous filing.

While it would be silly of me to claim we are perfect, I did dodge that bullet as we did have the most timely compensation data available.