Archive for the ‘GAMCO’ Category

Mario Gabelli has long been criticized for his outsized remuneration at Gamco Investors Inc (NYSE:GBL). In 2005, a large investor in Gabelli Group Capital Partners, or G.G.C.P., Gabelli’s private company, sued him for, among other things, “looting the assets of the company.” According to this New York Times article, document disclosure in the case revealed that Gabelli “pays himself 20 percent of G.G.C.P.’s pretax revenue as a “management fee.” As recently as yesterday, the Wall Street Journal noted in its “Heard on the Street” column (subscription required):

… Mr. Gabelli’s compensation package has been a severe drag on earnings. In 2008, Gamco’s assets fell by a third and net income totaled $25 million. Even so, Mr. Gabelli received $46 million in cash compensation, 13 times as much as the second-highest-paid executive.

Gamco took an activist position in Biglari Holdings Inc (NYSE:BH) back when it was the humble Steak n Shake Company. Gamco’s most recent amendment to its 13D filing is an interesting change in direction. From Item 4 Purpose:

GAMCO has announced that, to the extent it has voting authority over its investment advisory accounts, GAMCO intends to vote AGAINST approval of the Incentive Bonus Agreement between the Issuer and Sardar Biglari, dated April 30, 2010 (the “Agreement”) at a special meeting of shareholders of the Issuer at which the Agreement will be submitted for approval by the shareholders of the Issuer. Consistent with applicable laws and regulations, GAMCO may discuss its plans to so vote with a limited number of institutional shareholders and others.

What’s in the Incentive Bonus Agreement? This:

Company shall pay to Executive, determined as of the last day of each fiscal year of Company (including any fiscal year in which any of the events set forth in Section 4(a) occur) (“Incentive Compensation Calculation Date”), incentive compensation equal to the Incentive Compensation Amount (as defined below) as of such Incentive Compensation Calculation Date; provided, however, that no duplicate Incentive Compensation Amount shall be paid to Executive in any fiscal year. The Incentive Compensation Amount shall be paid to Executive as promptly as practicable after each Incentive Compensation Calculation Date, and in no event later than 75 days thereafter (the “Payment Date”), subject to Section 6(c). The “Incentive Compensation Amount” means the amount computed (subject to proration with respect to any fiscal year during the term of this Agreement in which any of the events set forth in Section 4(a) occurs, determined based on the date of such event) using the following formula where “x” equals 1.05 (subject to proration for the 2010 fiscal year and any short fiscal year during the term of this Agreement) and “n” equals the number of years between the most recent Incentive Compensation Calculation Date and the Incentive Compensation Calculation Date on which the High Water Mark was achieved:

(0.25)(New Book Value – ((High Water Mark)(x)n))

In summary, Biglari gets 25% of the annual gain in book value over 5%. Gabelli gets 20% of pretax revenue. Mario thinks Sardar is going to be paid too much. Isn’t this a case of  the pot calling the kettle greedy? Or is this just gamesmanship on Gabelli’s part?


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The Official Activist Investing Blog has published its list of activist investments for January (the investments with links are to our latest update at the time of this post):

Ticker Company Activist Investor
ABVA Alliance Bankshares Corp John Edgemond
AMLN Amylin Pharmaceuticals Carl Icahn; Eastbourne Capital
AVGN Avigen Inc. Biotechnology Value Fund
BIOD Biodel Inc Moab Partners
BKS Barnes & Noble, Inc Yucaipa Companies
CHUX O’Charley’s Inc Crescendo Partners
CITZ CFS Bancorp Financial Edge Fund
CLCT Collectors Universe Shamrock Activist Fund
CNBC Center Bancorp Lawrence Seidman
CPWM Cost Plus Inc Stephens Investment Holdings
CRGN CuraGen Corp DellaCamera Capital
CTO Consolidated Tomoka Land Co Wintergreen Advisers
CWLZ Cowlitz Bancorporation Crescent Capital
DFZ R.G. Barry Corporation Mill Road Capital
DITC Ditech Networks Lamassu Holdings
EDCI EDCI Holdings Chapman Capital
ENZN Enzon Pharmaceuticals DellaCamera Capital; Carl Icahn
EPL Energy Partners Wexford Capital
FNHM.OB FNBH Bancorp Andrew Parker
FSBI Fidelity Bancorp Finacial Edge Fund
FSCI Fisher Communications Gamco Investors
FSFG First Savings Financial Group Joseph Stilwell
GET Gaylord Entertainment TRT Holdings
ICGN ICAgen Inc Xmark Opportunity Partners
INFS InFocus Corp Nery Capital Partners
ISH International Shipholding Corporation Liberty Shipping Group
JTX Jackson Hewitt Tax Service Shamrock Activist Value Fund
KANA Kana Software Inc KVO Capital Management
KFS Kingsway Financial Sevices Joseph Stillwell
KONA Kona Grill Mill Road Capital
LAQ The Latin America Equity Fund City of London Investment Management
MGAM Multimedia Games Inc Dolphin Limited Partnership
MIPI Molecular Insight Pharmaceuticals David Barlow
NDD Neuberger Berman Dividend Advantage Western Investment
NTII Neurobiological Technologies Highland Capital Management
NTMD Nitromed Inc Deerfield Capital Management
OFIX Orthofix Ramius Capital
PIF Insured Municipal Income Fund Inc Bulldog Investors
PPCO PenWest Pharmaceuticals Perceptive Advisors;

Tang Capital Partner

PRSC Providence Service Corp 73114 Investments
PRXI Premier Exhibitions, Inc Sellers Capital
QDHC Quadramed Corp BlueLine Capital
RDC Rowan Companies Steel Partners
SLTC Selectica Inc Trilogy
SONS Sonus Networks Legatum Limited
SSE Southern Connecticut Bancorp Lawrence Seidman
SUAI Specialty Underwriters Alliance Hallmark Financial Services
SUG Southern Union Co Sandell Asset Management
SUMT SumTotal Systems Discovery Capital
SUTM.PK Sun Times Media Group Davidson Kempner Partners
TEC Teton Energy Corp First New York Securities
TESS Tessco Technologies Discovery Equity Partners
TIER Tier Technologies Inc Parthenon Capital
TMI TM Entertainment & Media Bulldog Investors
TRGL Toreador Resources Nanes Delorme Partners
TRMA Trico Marine Services Kistefos AS
TUTR Plato Learning Stephen Becker
TWMC TransWorld Entertainment Riley Investment Management
VLCY.PK Voyager Learning Company FoxHill Opportunity
WFMI Whole Foods Market Inc Yucaipa Companies
WMPN.OB William Penn Bancorp Joseph Stilwell
WOC Wilshire Enterprises Bulldog Investors
WRLS Telular Corp Simcoe Partners
YSI U-Store-It Trust Todd Amsdell
ZEP Zep Inc. Gamco

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