Chicago Tribune Melissa Harris column: Firm unearths exec perks buried in SEC reports [Chicago Tribune]

Feb. 21--Morningstar CEO Joe Mansueto has been gobbling up businesses at a clip of more than three per year since the investment tracking company went public in 2005. Most of them build databases, but one new acquisition, Footnoted.org, tracks unflattering or unusual expenditures that public companies try to bury in rarely read Securities and Exchange Commission filings.

These filings take hours to pore through, and most people never drill down that far. But trained eyes, like those of site founder and journalist Michelle Leder, find gems in the minutiae. Cases in point:

-- In May 2009, as companies like Sara Lee began to eliminate executive cars and private use of corporate jets, Motorola co-Chief Executives Gregory Brown and Sanjay Jha were required to use corporate jets for personal travel "in connection with our overall security program," which resulted in a combined "incremental cost" of $558,306 on the planes alone in 2008. But at some point between 2004 and 2009, Motorola downsized (but also updated) its fleet of six Cessna Citation IIIs and a Gulfstream IV with three Gulfstreams, including one that can go around the world with one stop, and a Dassault Falcon 50EX.

-- In 2008, Deere & Co. began disclosing that its executives were receiving company-provided car washes, at an unreported cost. More recent filings show that's still the case. But beginning in fiscal 2010, executives have to reimburse the company for security services, such as drive-by checks and alarm responses at their homes.

-- In fiscal 2007, Deere Chairman Robert Lane received $324,825 worth of personal use of the corporate jet, a threefold increase from the year before. His use rose again in 2008 to $401,732. But in 2009, it dropped to $91,509. Why? The company stopped including maintenance costs in its calculations due to "minimal personal usage of company aircraft."

These perks also can go two ways. When former FedEx Executive Vice President Kenneth Masterson retired five years ago, the company gave him an unusual gift: a John Deere tractor.

Footnoted has also highlighted the growing trend of companies paying for "financial counseling" for its executives. Normally, this perk amounts to a few thousand dollars. But at Kraft, Executive Vice President Sanjay Khosla received a $51,679 "financial counseling allowance" in 2007. His allowance fell to a more standard $7,500 in 2008. The company also apparently spent $12,443 maintaining Chief Financial Officer Timothy McLevish's former home in New Jerseyin 2008, in "accordance with Kraft's relocation policy" for employees "above a certain level."

Kraft did not return calls for comment; the other companies confirmed details or otherwise acknowledged the filings.

Kunal Kapoor, president of the Morningstar unit leading the Footnoted acquisition, says his interest began when his own team members began regularly checking its Web site.

"It's certainly a skill set that's hard to replicate," Kapoor said. "It takes years and years of reading filings to understand how they work and to actually take it up a notch and find interesting bits of info."

With Morningstar's backing, Leder, who works out of her home in Peekskill, N.Y., said she will begin adding to her staff.

Morningstar and Leder did not release the purchase price, but on Footnoted, she was quick to state that unlike the executives she blogs about, she did not get "the keys to the Gulfstream, the corporate apartment in Paris, the company yacht, the lifetime consulting contract and, of course, a tax gross-up. ... That's because Morningstar doesn't believe in those things. Nor do I."

Some other tidbits about Chicago-area executives from Footnoted.org:

-- In his new position as nonexecutive chairman at Armstrong Worldwide Industries, Chicagoan Jim O'Connor agreed to return the fitness equipment its outgoing CEO personally purchased for the company's gym. Armstrong will foot the bill for the return shipping.

-- After former Idex CEO Dennis Williams retired to Florida in 2005, his salary, for about a year, jumped to three times as much as he was making when he was working. And some form of payment, $31,000 every other week, continued until 2007.

Movers and shakers

At Jones Lang LaSalle, Todd Burns has been promoted to president of project and development services in the Americas region. Jim Schiefelbein, chief marketing officer at Baird & Warner, is the new chairman of the board at the Frank Lloyd Wright Preservation Trust. Peruvemba Satish has been named managing director and chief risk officer for investments at Allstate. Satish, 45, was previously chief risk officer at Jamison Capital Partners in New York. At Ernst & Young, Craig Johnson has been named Midwest advisory managing partner. He previously worked in Philadelphia. And at NiSource in Merrillville, Ind., Jimmy Staton will lead the company's Indiana utilities, replacing Eileen O'Neill Odum, who is resigning March 1.

Coming up

Chicago Confidential will be reporting this week's columns from Washington, D.C. Sign up for our new RSS feed at http://feeds.feedburner.com/chicagotribune/chicagoconfidential.

Melissa Harris, who always finds it ironic that people with business acumen are getting free financial counseling, can be reached at [email protected] or 312-222-4582. Twitter@ChiConfidential.

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