t seems the folks running Janus are ticking off one of their largest shareholders. Yesterday, Highfields Capital Management
made its displeasure known. The buyout fund filed a letter Jonathon S. Jacobson
faxed to Janus Chairman Landon Rowland
expressing displeasure of Janus' failure to reveal compensation for its key operating executives.
Highfields contends that Janus plotted to delay details of the compensation it paid to executives including Helen Young Hayes
, James Goff
and CEO Mark Whiston
by more than a year by instead listing compensation of "non-operating" executives at the firm.
In response, Highfields said it intends to vote against the firm's Management Incentive Compensation Plan, the performance measures for its Long Term Incentive Stock Plan and slate of three directors nominated by management for election. Highfields owns roughly 9.1 percent of the outstanding shares in Janus. Highfields has been opposed to management at the company since it started building its stake in the fund firm last year.
"Your SEC filings are deficient under both specific disclosure requirements, and the overarching prohibition on proxy material omitting material information relevant to a shareholder's voting decision. Beyond specific defects, management's filings constitute a breach of faith with its shareholders, one that is particularly egregious for a company whose business it is to invest as a fiduciary in the public markets," wrote Jacobson in explanation of his firm's decision to oppose management.
Jacobson also contends that the firm hid the compensation of the trio of key executives by listing pay for six non-operating executives in its most recent filing instead. Janus of revealing the compensation about the executives it covered itself by stating in the filing that "There may be Company employees whose compensation exceeds that of the named executive officers. If this is the case, such persons are not named in the table because they are not executive officers of the Company."
"We infer that this is intended to justify the omission of compensation details for Mr. Whiston and Ms. Hayes, as well as Mr. James Goff, all of whom functioned as executive officers since September 2002," wrote Jacobson. He added that not revealing the information is "another example of management relying on form to avoid revealing substance."
Janus came under further attack for not revealing stock grants made to Hayes earlier this year and for failing to name her as a corporate officer despite her importance to the firm as both a director and chief investment officer.
The implication, according to Jacobson, is that the firm is delaying naming her as an officer to avoid having to disclose her compensation to shareholders.
"Yet the Company has avoided making her a corporate officer, apparently believing this is a sufficient justification to keep secret her compensation history and future entitlements," wrote Jacobson. He added that Janus failed to disclose a grant of $10 million of stock it made to Hayes on March 12 by using March 12 as a cutoff date in a March 20 filing. He noted that Janus used April 3 as its cutoff date for other information used in the filing.
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