PhillyInc

Mace Security International Inc., the Mount Laurel company that makes pepper sprays used to ward off assaults, said an accounting controller at its security division in Florida embezzled at least $300,000 from the company. The theft was discovered during full-year financial reviews, Bloomberg News reported. The unidentified employee was fired in April.

“Highly narcissistic CEOs — defined as those who have very inflated self-views and who are preoccupied with having those self-views continuously reinforced — can be expected to … generate more extreme and irregular performance than non- narcissists, although they do not generate systematically a better or worse performance.”

The study is by Arijit Chatterjee, a graduate lecturer, and Donald Hambrick, Smeal Chaired Professor of Management. They measured the level of narcissism in 111 CEOs of computer software and hardware companies, then compared it to the subsequent strategies and performance of their companies. Their interesting, if perhaps arguable, indicators of narcissism are: "The prominence of the CEO's photograph in the company's annual report; the frequency of the CEO's name appearing in company news releases; the use of first person singular pronouns (I, me, mine, my, and myself) by the CEO in interviews; and the CEO's cash and non-cash pay compared to the company's second highest executive." The study is coming out in the next Administrative Science Quarterly.

- Thomas Ginsberg

"The businesses that the companies were selling generated positive cash flow and the businesses that the company is expanding into continue to lose substantial amounts of money and haven't achieved their promise" Shapiro told PhillyInc. "It's greatly concerning."

Mace has been expanding its security businesses from proceeds of the sale of a national chain of car washes it owns. In its belated first-quarter filing to the SEC this week, Mace reported a net loss of $658,000, or 13 cents a share. That was narrower than the $966,000, or 6 cents a share, in the same period a year earlier. Sales fell about 13 percent to $11.6 million.

But the dismal quarterly results hardly will be the only subject of interest. Among other topics likely will be the company's controversial compensation deal awarded to CEO Louis Paolino Jr. and the embezzlement uncovered at one of its businesses. To make matters worse, its quarterly SG&A (selling, general and administrative) expenses rose 8 percent from 2006 to 2007 because of increased legal fees for the embezzlement probe and for costs related to an investigation of the hiring of illegal immigrants at its car washes.

Shapiro says this is the first earnings conference call Mace has held with its investors in years. Most publicly traded companies began holding them every quarter following the adoption of the SEC Regulation FD in 2000. Also, companies usually hold these earnings conference calls on the same day or just after releasing earnings. Shapiro said he didn't mind waiting to hear from Mace's management. "As a shareholder, I prefer the extra time provided. It provides for a higher quality conference call with thoughtful questions."

The call is scheduled to start at 11 a.m. People can dial-in at (888) 751-6352 or listen to a Web cast at www.mace.com. Replays will be available from 5 p.m. July 13 to 5 p.m. July 27 and can be accessed by dialing 800-642-1687 with the ID 10900.

- Jonathan Berr

Is Mace Security International Inc. (Nasdaq: MACE) thinking of leaving the security business? That's the question that emerged today as Chief Executive Louis D. Paolino Jr. faced a barrage of skeptical and at times hostile questions during a two-hour conference call with shareholders about his plans to turn around the company in Mt. Laurel.

• Nearly a third of companies surveyed (32.1%) employ staff to read or otherwise analyze outbound e-mail. 38.8% of U.S. companies surveyed with more than 20,000 employees do this.

Andrew Shapiro, whose Lawndale Capital Management is Mace's largest shareholder, reviewed the possible reasons, or mysteries, for Pirollo's sudden departure after eight years at Mace in an e-mail to PhillyInc: "It is unclear if this immediate resignation was as a result of embezzlement by the company's Florida division controller, historical internal control questions leading to late regulatory filings, problems with last week's acquisition of Linkstar or other factors." Further confusing the situation were recent comments by Paolino about his frustration with the security business and his growing interest in the online world.

- Jonathan Berr

The bureau did manage, however, to get a blurb from Ben Bernanke and pasted it on the site: "The Economic Census is indispensable to understanding America's economy." (No mention of rates.)

- Thomas Ginsberg

Come and get me!

Not with terms like “dead cat bounce,” “eyeballs” and “gross impressions.” That one is a personal favorite. It’s what employees do when they have to imitate their bosses' motivational speeches. (Actually, it’s an advertising term for how many times a message is seen or heard.)

How about this one, courtesy of today's corporate news: “Reverse logistics.” Does that mean making tidy and orderly systems messy? Most of us have kids or spouses who are expert in that -- no need to venture into the business world at all.

The term comes to us today from Genco Infrastructure Solutions Inc., which praises itself as the “recognized leader in Reverse Logistics.” The Pittsburgh company and its sister Genco subsidiary, Capital Returns Inc., just landed a $38.4 million, five-year-contract from the Philadelphia-based Defense Logistics Agency, Defense Supply Center.

If logistics means moving supplies or products efficiently through a manufacturing, warehousing and distribution center, reverse means the opposite — sucking all that product away from its former final destination. Genco, which handles retail returns, for example, will be sucking back (efficiently, we presume), expired or soon to be expired pharmaceuticals from the Defense Department along with medical supplies and related waste materials. Efficiency will be key, since the materials will come from throughout the United States as well as overseas.

Have a favorite term? Send it in with your own definition (but please, include the real meaning too!)

- Jane M. Von Bergen

Integra LifeSciences Holdings Corp. (NASDAQ: IART) Chief Executive Stuart Essig may be the medical device industry's answer to "Let's Make a Deal's" affable host Monty Hall.

Since 2004, the Plainsboro, N.J.-based company has spent $349 million acquiring 13 businesses or product lines. Earlier this month, Integra reported "strong" quarterly revenue growth for the quarter of 35 percent thanks in part to its acquisition strategy. On the same day, the company also announced it had acquired IsoTis Inc. (NASDAQ: ISOT), another device maker, for $51 million, a deal the company said would "create a global leader in regenerative medicine."

Though that sounds great, there's a big problem: the company's accounting controls are a mess. Its SEC filing said a "material weakness" Integra identified in the first quarter "continued to exist "as of June 30." It added that "remediation of this weakness has not been completed." Though Integra isn't more specific about the problem, it suggested that more might be found:

"While we aim to work diligently to ensure a robust accounting system that is devoid of significant deficiencies and material weaknesses, given the growth of our business through acquisitions and the complexity of the accounting rules, we may, in the future, identify additional significant deficiencies or material weaknesses in our disclosure controls and procedures and internal control over financial reporting."

A company spokesman didn't immediately return a phone call from PhillyInc. For now, investors seem to like the deals Essig is finding. Integra's shares have soared more than 30 percent this year.

- Jonathan Berr

Now that Mace Security International Inc.'s (NASDAQ: MACE) largest shareholder Andrew Shapiro has added to his holdings in the beleagured security products company, he demands to know how he can reach out to fellow shareholders of the Mt. Laurel security firm.

Shapiro's firm, Lawndale Capital Management L.L.C., intends to "communicate with Mace's shareholders with respect to matters relating to their mutual interests," Shapiro said in a SEC filing, adding that could include "nominating various individuals to Mace's Board of Directors as alternatives to current board members and/or to take other such action as Lawndale believes, in its sole judgment, may be necessary and/or appropriate to address Mace's governance weaknesses for the purpose of enhancing Mace's long-term sustainable value."

Along with other shareholders, Shapiro, who now owns 1.53 million shares, up from 1.42 million in June, has long complained that Mace's board of directors is too deferential to Chief Executive Louis Paolino. They have also claimed that Paolino is overpaid and receives unusual bonuses for both buying and selling companies. A Mace spokesman didn't immediately return a phone call to PhillyInc.

In June, Shapiro asked the board to remove Paolino's brother Matthew, who is also a company vice president, from the board and to expand its membership from five to seven people. He also recommended Eugene I. Davis, Gerald T. LaFlamme and Donald R. Raefield to be appointed as replacement board members.

One of the few things that Mace and Shaprio agree on is that the company's stock is cheap. Mace said yesterday that it would buyback as much as $2 million worth of its stock because it's currently trading under its book value (total assets excluding tangible assets and liabilities such as debt).

Shares of Mace have tumbled more than 20 percent this year amid concerns about the continued poor performance of its security business. During the six months ended June 30, security sales fell 11% to $11.06 million from $12.44 million.

The latest quarterly earnings weren't so hot either. Mace had a net loss of $1.26 million, or 8 cents, compared with $1.88 million, or 12 cents. Revenue fell to $11.3 million.

Mace, which released its earnings yesterday, has scheduled its earnings conference call for Thursday at 11 a.m. People can access the by calling 1-888-751-6352. A Web cast is available at the Web site

As usual, there will be plenty to talk about.

- Jonathan Berr

Mace Security International Inc. (NASDAQ: MACE) Chief Executive Louis D. Paolino Jr., who trumpeted his company's plans to buyback $2 million in shares earlier this week, was blasted by his company's largest shareholder Andrew Shapiro and others over its stock buyback plans and its disclosure that it never actually bought any shares back under a $3 million repurchase plan announced in 2004.

Paolino discussed the stock-buyback-that-never-happened during his company's quarterly earnings conference call yesterday. And it led him to trade barbs with Shapiro, the head of Lawndale Capital Management LLC., who has been railing about Paolino and his management of Mace for many months.

During the call today, Shapiro said: "I've been astounded by what I have been hearing in the call." He said the 2004 buyback had been mentioned in filings since 2004, including one issued a few weeks ago, as fully authorized and ongoing.

Paolino snapped back that Mace was advised by its legal counsel that it needed a new board authorization for the new buyback, even though it never purchased any shares from its old plan. He said to Shapiro on the phone, for all to hear: "Hey, what is your issue with this. The rules are the rules."

When Shapiro asked Paolino why this year's buyback is smaller than the one (promised) in 2004, Paolino replied that there was a different "decision-making process." That's probably code for the stock is much cheaper. In 2004, it hit more than $7 and today trades under $2.

In an interview after the call, Shapiro said he wished Paolino had bought Mace stock instead of investing in other companies that turned out to be money-losers. This time, Shapiro said he hopes Paolino really does buy shares, but he said he isn't optimistic."After three years of a much larger buyback and the stock price collapsing providing innumerable downtick purchasing opportunities and with the company not acquiring a single solitary share, I see no reason to date that any shares under the current buyback will be acquired either."

Both Paolino and Shapiro agree that Mace's stock is cheap. Shares of the Mount Laurel company are down about 24 percent this year and are trading under the company's book value (total assets minus liabilities). Said Paolino: "Where the stock is right now – we're very excited to be buying it back. In fact, they're (the board) very open to discussing bigger buybacks."

- Jonathan Berr

Once again, the Henry F. Kaiser Family Foundation's annual health insurance survey, released yesterday, showed that health insurers' efforts to sell high-deductible health plans haven't met with much success, particularly in larger firms.

That's because, Kaiser researchers said, employees, when given a choice, aren't tremendously excited about having to pay high deductibles, especially if they are low-income and even more especially if their companies don't help them fund the deductibles through a savings or reimbursement program.

That's Kaiser's take, but Ivy Silver, a benefits consultant and president of Commonwealth Consulting Inc., in Jenkintown, has seen a different trend. Yes, companies are looking at these high deductible plans, but they are adopting them with a little twist, she said.

Instead of across-the-board high deductibles, companies, Silver said, are carving out certain benefits, such as surgery, and making just that portion high deductible. Then the companies are self-insuring for that particular deductible. True, they have to employ a half dozen h.r. specialists to sit with their fingers crossed, hoping that nobody has to pay a visit to the OR. But, Silver said, they get a break on the cost of their premiums.

So why do insurance companies keep pitching these products? Kaiser officials had an answer for that too. They pitch them because they are the only real innovation -- other than disease management -- that the insurance companies have to offer.

- Jane M. Von Bergen

The saga continues: The No. 2 shareholder in Mace Security International Inc. (NASDAQ: MACE), the beleaguered security products company in Mount Laurel, says in an SEC filing that Mace had asked Richard Barone, who heads its No. 2 shareholder Ancora Capital Inc. of Ohio, to join the board of directors in place of Matthew Paolino - brother of Chief Executive Louis D. Paolino Jr. - as Mace looks to avoid a showdown with the top shareholder Lawndale Capital Management L.L.C.

Barone told PhillyInc he was surprised by the offer. He tells us that hadn't sought the job. And that's not all. "I've never talked to a single person over there. They don't know me," he told PhillyInc.

Either way, Barone is not getting a seat and Paolino isn't getting his support. According to the Ancora filing, Barone was offered the seat during a Sept. 7 telephone call from Mark Alsentzer, who chairs Mace's nominating committee. In exchange for the seat, Barone was expected to back the company's slate to the board of directors at the annual meeting this coming December. But not only did Barone turn down the offer. He also gave his backing to Lawndale Capital's board nominees. Like Lawndale, Ancora has grown frustrated with Mace's poor performance, including the 20 percent decline this year in its stock price.

Says the Ancora filing: "Mr. Barone noted the consistent operating losses over the past five years, a program of failed acquisitions, the inability to achieve operating efficiencies, the incident of fraud at the middle management level, the extraordinary high legal expenses associated with the hiring of alleged illegal aliens, and a compensation structure which rewards failure instead of success."

Lawndale, which has a 9.6 percent stake in Mace, called for Matthew Paolino's ouster from the five-person board in June. The investor also called for the board to be expanded to seven and proposed three people to fill those vacancies. None of the nominees have been contacted by Mace's independent directors, Shapiro said.

"It was actually a very hostile act toward our proposal," Shapiro said, adding that Lawndale was "very gratified" that Barone turned down Mace's offer.

Since Paolino is balking at expanding the board, Shapiro said he would consider a "less desirable alternative" of keeping the board at five instead of expanding it to seven. That's provided that a sufficient number of independent directors are new.

"Under this scenario, four of the five Mace board members would be independent, and three of the five would be new to Mace's Board," Lawndale said in a separate filing. "Lawndale believes, given the operating history and oversight experience of the nominees it submitted, either proposal it has made to Mace's Board would result in an improved board."

- Jonathan Berr

Howard Gittis died last night in NYC. His office has sent out notices today. The Philadelphia-area native has been Vice Chairman & Chief adminstrative officer of MacAndrews & Forbes Holdings Inc., the holding company of Ronald O. Perelman, for the past 22 years. Gittis' office says he was "Ronald's closest friend and advisor and business partner." Gittis served on the boards of most of MacAndrew companies including Revlon, Panavision, Scientific Games, Allied barton Security Services, Harland Clarke and M&F Worldwide, where he had been chairman and CEO.

Gittis' impact in the Philadelphia area was huge, even after he moved to New York in 1985. He was a partner and chairman of the executive committee at Wolf, Block, Schorr and Solis-Cohen LLP, where he worked for 25 years. Gittis' office notes that he had been Chairman of the board of trustees of Temple University, where the Howard Gittis student center is named for him. Here's a profile in the Temple Times a few years ago. He was also a memeber of the boad of overseers of the University of Pennsylvania Law School, where Gittis Hall and the Gittis Center for clinical and legal studies are named for him. In politics, Gittis was also a heavy weight. Since 2004, he has donated more than $240,000 to Democratic and Republican candidates and committees.

- Thomas Ginsberg

So, how well did Deb Shops Inc.'s (NASDAQ:DEBS) executives fare in selling the company to a private equity group for $395 million? CEO Marvin Rounick will get a three-year consulting contract worth $1.2 million. So says its SEC filing today. Secretary/Treasurer Warren Weiner is getting $900,000. The executives and their spouses are getting lifetime healthcare along with the ability to get automotive insurance under the company's group rates. And the new owners will reimburse Rounick and Weiner up to $15,000 each for legal fees and expenses "in connection with their negotiation of their respective consulting agreements and the voting agreement."

On the other hand, Rounick and Weiner "will be subject to non-solicitation and non-competition restrictions during the three year period of the consultancy."

- Jonathan Berr

For many years, BusinessWeek magazine published a list of "best and worst boards." Now Penn State associate professor Henock Louis has documented that roughly two-thirds of those "worst" companies did shape up after the media exposure. In a research paper, the Smeal College of Business professor concludes there is a causal link between the publication and cleanups. He also says savvy Wall Street traders profited handsomely from the articles by buying -- not selling -- the companies' stocks in response to the exposure that they saw not as bad news, but a harbinger of corrective action.

- Thomas Ginsberg

The Forum of Executive Women released its study of women on boards and in executive suites in Philadelphia today. Essentially, there's been little progress made year-to-year and in fact, diversity is down.

Forty of the hundred top companies have no women on their boards. However, in seven among Philadelphia's top 100 publically-held companies, women make up 25 percent or more of the board. And among those, plus-size retailer Charming Shoppes Inc. (Nasdaq:CHRS) is the only one where women are in the majority, holding 5 out of 9 seats. CEO Dorrit J. Bern chairs the board. In another company, insurer Cigna Corp. (NYSE:CI), three out of 10 seats on the board are held by women, and one of them, Carol Cox Wait, heads the director and nominating committee. In the report, she says assembling a diverse group in the board room fosters thinking "from a bunch of different boxes." Wow, Cigna has thinking boxes!
- Jane M. Von Bergen

Things are heating up (even more than usual) at Mace Security International Inc. (NASDAQ:MACE) in Mount Laurel. Andrew Shapiro's Lawndale Capital Management, one of Mace's biggest shareholders, based in Mill Valley, Calif., told the SEC last week that it has formally notified Mace - led by Louis D. Paolino Jr. - that it will put up four candidates for an expanded board at the next annual meeting. It previously had named three. The fourth, first mentioned in a late August filing, is Philip B. Livingston, the vice chairman of an auditing software company Approva Corp. in Reston, Va. (who also has an affinity webite www.phillivingston.com). The others are listed here and in the filing. Lawndale's letter states that the firm has raised its complaints with Paolino and his team several times:

... such discussions to date have been fruitless and, in Lawndale's opinion, only highlight the existing Board's lack of independence. As a result, Lawndale currently believes that the only way Lawndale can achieve the improvements in the Company's governance structure necessary to create value for all shareholders is to conduct a proxy contest to change the Board and approve the other items set forth in the Lawndale Notice. As described in the Prior Letters and the Lawndale Notice, Lawndale believes that replacing all of the Board members (other than Mr. Paolino) with truly qualified and independent directors who will act solely in the best interests of the Company's shareholders is the best way to improve the Company's governance structure. ...

No date for the annual meeting, yet.

Don Russell, who writes the Daily News' Joe Sixpack column, got his 15 minutes (or 370 words) of fame on Wall Street yesterday when the Wall Street Journal's Deals Journal blog did a Q&A with him about the MolsonCoors-SABMiller merger. His take on "BudMillerCoors" beers elicited some reader criticism of "beer elitists" vs. guys who'll drink anything vs. beer that tastes like, well, it rhymes with "kiss". Just another day at the office for Don (uh, Joe).

- Thomas Ginsberg

Campbell Soup Co. (NYSE: CPB) reported to the SEC yesterday that it gave CEO and president Douglas R. Conant total compensation last year worth $13.43 million. That's a lot, and evidently much more than before, although figuring out just how much is tough despite -- or because of -- the SEC's demand for clearer reporting. Campbell said it bumped up his base salary to $1.13 million from $1.07 million. The biggest gain came from $6.49 million in stock awards this year compared with zero (yes, $0) last year. This week's SEC report on its review of compensation disclosures called for clearer reporting, but we may have to wait till next year to see the real trend.

- Thomas Ginsberg

Louis D. Paolino Jr., CEO, president and chairman of Mace Security International Inc. (NASDAQ: MACE) of Mount Laurel, has buried the hatchet with its major dissident shareholder Lawndale Capital Management LLC, run by Andrew Shapiro, after many months of acrimony. Or have they? It appears that the hatchet was used to chop out Paolino's legs, and it may be positioned for more whacking.

Lawndale and Mace, marketer of the well-known security spray by the same name, finally have agreed (see Mace's press release and Lawndale's SEC filing) that Mace will expand its board to six seats from five currently, and will boot Paolino's brother Matthew and Burton Segal, a Bryn Mawr accountant. On the new board, five members (80 percent) will be independent, up from three (60 percent) currently, and three will be entirely new. Paolino gets to remain chairman and avoids a likely nasty proxy fight with Shapiro at the coming annual meeting. He also gets to keep two current independent members, Mark Alsentzer and Constantine Papadakis, and will get to appoint a third, Jack C. Mallon. But Shapiro gets two of his four nominees on the board, Gerald LaFlamme and Dennis Raefield, the latter appointed immediately this week.

And then there's the governance hatchet. Mace has agreed to Lawndale's bylaws demand that at least "66.667 percent" of the board members will be independent. And Mace has amended its guidelines to require that the board approve all committee assignments -- read: compensation committee -- by a majority vote. One of the many complaints of Shapiro (and other dissident shareholders) was the boards formula for setting Paolino's compensation, which they claimed created incentives for him to make acquisitions regardless of performance, something chairman Paolino has denied.

Mace didn't respond to our call today. But it appears Lawndale has mostly prevailed in this drawn-out and sometimes dramatic tug-of-war. Frankly, we may miss the fireworks. But the resolution actually may enable Mace to straighten itself out, with Lawndale looking over its shoulder.

- Thomas Ginsberg

Louis D. Paolino Jr., CEO, president and chairman of Mace Security International Inc. (NASDAQ: MACE) of Mount Laurel, has buried the hatchet with its major dissident shareholder Lawndale Capital Management LLC, run by Andrew Shapiro, after many months of acrimony. Or have they? It appears that the hatchet was used to chop out Paolino's legs, and it may be positioned for more whacking.

Lawndale and Mace, marketer of the well-known security spray by the same name, finally have agreed (see Mace's press release and Lawndale's SEC filing) that Mace will expand its board to six seats from five currently, and will boot Paolino's brother Matthew and Burton Segal, a Bryn Mawr accountant. On the new board, five members (80 percent) will be independent, up from three (60 percent) currently, and three will be entirely new. Paolino gets to remain chairman and avoids a likely nasty proxy fight with Shapiro at the coming annual meeting. He also gets to keep two current independent members, Mark Alsentzer and Constantine Papadakis, and will get to appoint a third, Jack C. Mallon. But Shapiro gets two of his four nominees on the board, Gerald LaFlamme and Dennis Raefield, the latter appointed immediately this week.

And then there's the governance hatchet. Mace has agreed to Lawndale's bylaws demand that at least "66.667 percent" of the board members will be independent. And Mace has amended its guidelines to require that the board approve all committee assignments -- read: compensation committee -- by a majority vote. One of the many complaints of Shapiro (and other dissident shareholders) was the boards formula for setting Paolino's compensation, which they claimed created incentives for him to make acquisitions regardless of performance, something chairman Paolino has denied.

Mace didn't respond to our call today. But it appears Lawndale has mostly prevailed in this drawn-out and sometimes dramatic tug-of-war. Frankly, we may miss the fireworks. But the resolution actually may enable Mace to straighten itself out, with Lawndale looking over its shoulder.

- Thomas Ginsberg

Douglas R. Conant, the president and chief executive officer of Camden-based Campbell Soup Co. (NYSE: CPB), may soon spend a bit more time in New York. He has been elevated to chairman of the Conference Board, the influential business-executive organization that, among other things, produces the Consumer Confidence Index and the leading economic indicators index. The group's leaders and members may be what people unwittingly mean when they say "captains of industry." Its board boasts CEOs of many global corporations. Its other Philly-area CEO is Richard T. Clark of Merck & Co. Inc. (NYSE: MRK). A chairman's tenure usually lasts two years.

- Thomas Ginsberg

When David Mangini resigned from Mothers Work Inc. (NASDAQ: MWRK) last July as executive vice president of merchandising after a weak quarter, the company said he would stick around to help find his successor. Now the company says that Rebecca Matthias, the cofounder and president, actually will step into the job "on an interim basis" until a full-timer is found. Mangini now will formally take the consultant gig the company promised him as part of his separation.

Regina Heilmann Knecht isn't so sure how great it is to be president of John F. Scanlan Inc., a Philadelphia-based, 40-employee representative for manufacturers of heating, ventilation and air-conditioning systems. As she explains it, she gets the title and the extra work, but shares the power, and whatever glory there is, with five of her close relatives.

This is a company that specializes in employing family members. Her father, in his 80s, had been an employee of the company before he bought it. He still works there, along with Knecht's leadership gang of five, which includes her sister, Chris. One of their in-laws works there, as does the in-law's brother, and someone else's mother, who comes in two days a week. That makes nine Heilmann family members and their relatives.

There is also the Gannon family of employees -- a son, a nephew, the nephew's two brothers-in-laws and one of their sons, for a total of five.

There are two brothers from another family who run the sales office in the Poconos.

Add it up and it looks like 40 percent of the employees have family ties. What do you think? Can your company top that number and percent? Does it add stability or cause problems, or both on alternate days? What's it like at Thanksgiving? And what's it like if you aren't part of the family?

- Jane M. Von Bergen

What effect will the credit crunch, high oil prices, volatile stocks, economy jitters and ever-present terrorism threats have on -- company holiday parties? Leave it to the outplacement firm Challenger, Gray & Christmas Inc. of Chicago to pitch an answer. Its survey (download here) of about 100 H.R. executives nationwide finds nearly 90 percent saying companies plan to hold holiday parties this year, up from 79 percent last year. Two-thirds said the parties will cost the same or less this year.

Unreliable and anecdotal data, to be sure. The firm's CEO, John A. Challenger, notes the survey may not capture distress in real estate and financial sectors. "Certainly, there are some industries that will not be holding lavish parties this year. In addition to the construction and real estate industries, the automotive sector continues to struggle. Meanwhile, Wall Street firms can undoubtedly afford to hold lavish parties, but it might be viewed as unseemly, considering they have suffered billions in losses tied to bad bets on high-risk mortgages -- losses which have thus far resulted in thousands of job cuts."

We’re just curious enough to ask the same question in our own poll: Will your Philly-area company hold a holiday party this year? And will it spend less, the same or more this year on the party? Maybe this will prove to be a truly interesting statistical indication for the economy. Well, not a chance, but maybe it'll be fodder for party small-talk ...

- Thomas Ginsberg

In our previous post on company holiday parties, we noted that the Chicago-based outplacement firm Challenger, Gray & Christmas Inc. released its second-annual survey that found more companies will hold holiday parties this year despite economic jitters. Now a similiar survey by the executive-search firm Battalia Winston of New York finds exactly the opposite trend: 85 percent of companies plan to hold a holiday party this year, down from 94 percent last year. Both polls had about 100 respondents. That's nowhere near enough, of course, to constitute a real poll. But we won't let that stop us, either: Take our poll up there to the left on the same question. Perhaps we can document an entirely different trend, such as businesses' rising use of falacious polls to promote their services.

- Thomas Ginsberg

David I. Wexler, the former CFO of Brandow Auto Group in Abington, is being hit with a lawsuit (along with other people) over alleged mismanagement of the firm, which was just sold. The Intelligencer's John Anastasi has an outline of the tale this morning. Anastasi writes that Brandow Auto Group executives are accusing Wexler of "overstating profits to increase his bonuses." He also writes:

Efforts to reach Wexler for comment over the last two weeks were unsuccessful. He didn't return messages left on his cell phone or a message left at a number listed as a business contact line. His home phone number apparently has been disconnected.

The lawyer who originally represented Wexler -- Philadelphia attorney Stephen Springer -- said he no longer was involved in the case now that it had moved to bankruptcy court. He declined to comment further.

"I'm not suggesting the claims in the suit are legitimate -- just because an allegation is made doesn't make it true -- but the Brandow civil suit is looking for monetary damages against Mr. Wexler," said Paul Winterhalter, Wexler's Philadelphia bankruptcy attorney.

"Mr. Wexler has no money to give and no money to fight," Winterhalter said.

Your mouth, that is.

Allow us to explain. Earlier this month, a Chicago firm said its survey showed that companies will spend more on holiday parties this year. Then a rival New York firm said no, its survey showed that they will spend less.

Figured we can play this game, too. Our own unscientific, unreliable and pretty facile online poll found a third answer: a plurality (42 percent) said Philly-area companies will do just what they did last year. Not more. Not less. Another quarter said their parties will be smaller and cheaper. And about 15 percent said their gigs will be bigger and costlier. But the total votes? Just 26, a tiny sampling, like those big firms' polls. In other words, who knows what really will happen.

Our poll: Will your Philly-area company hold a holiday party this year?

So let's call this whole parties-as-economic-indicator game off. Just go, enjoy yourself, don't bad-mouth any colleagues, then go home.

Which leads us to another, better angle: Robert Graber of yet another jobs firm, WallStJobs.com, sent out a reminder last week (download here) about office-holiday party etiquette. It emphasized keeping your mouth shut about colleagues. The urge to bad-mouth a co-worker or boss may be strong during shop talk. But be extra careful because you never know who's within earshot, he said, especially "in the elevator, on the coat check line and in the rest room!"

Did you ever stick your foot in your mouth at an office holiday party? We've worked for news organizations most of our adult life, and news organizations frankly are pretty bad about throwing office parties. Drinking sessions at a bar or dinner party, yes, but organized holiday shindigs, no. So we don't have a good blabber-mouth tale we can recall. Maybe it will come to us later. Maybe your stories will jar some memories.

- Thomas Ginsberg

Wading into treacherous survey waters, again, we see that a Salary.com survey finds that CEOs of businesses with 500 or fewer employees get higher cash compensation around here than nationwide, where the median was $233,500 last year. It concludes that in New Jersey, small-company chiefs got a median of $249,359; in Pennsylvania, they got $240,000; in Delaware, they got the most, $259,000. Considering the arms race of CEO compensation, Salary.com urges small companies to lure good CEOs with "noncash" benefits. So says its survey director, Christine Midwood:

"As companies grow, so do the responsibilities and paychecks of their executives. To attract and retain the best talent, it's important for smaller companies with smaller budgets to emphasize non-cash advantages such as company equity or work/life balance."

But who knows, maybe the small-timers already get a lot of non-cash perks. You won't find out from Salary.com's survey, because it doesn't seem to count them.

- Thomas Ginsberg

James W. Hall, the new chairman and chief executive of Yardley-based Journal Register Co., soundly beat the median for mid-size companies. (See previous post on small-company chiefs' compensation). The company has told the SEC that in late November it agreed to give Hall, among other things, $675,000 a year in base salary, a bonus of up to $1.35 million next year, use of a car, lodging and travel allowances, and $33,000 a month for a "consulting" gig if and when he departs from the chief exec job.

Speaking of the housing slowdown: Robert I. Toll, chief of Toll Bros. Inc., has told the SEC (here, here and here) that he exercised 960,000 stock options on Monday that were due to expire at year's end.

Though he apparently had little choice other than to lose the shares, it's hardly an ideal time to sell. Toll stock as of yesterday was down 33 percent from a year earlier and the company just reported its first-ever quarterly loss. Not a great moment for a big insider sale, either.

So, Toll preemptively announced that he sold only enough -- about $13.2 million worth of shares -- to cover the option purchases and taxes, and is holding the rest, about 374,600 shares. Toll chief operating officer Zvi Barzilay and chief financial officer Joel Rassman did likewise with their expiring options. Not that Toll is suffering. He disclosed that his holdings rose to 29.12 million shares, which were worth about $609 million yesterday. But give him credit for not taking the money now, when his option shares were still worth roughly $8.5 million. Because odds are good they will go down before going up. After all, this is the same CEO who openly predicts a real estate-led recession is coming.

- Thomas Ginsberg

Environmental Tectonics Corp., the Bucks County defense contractor run by William F. Mitchell (that's him to the left) and backed by Gerry Lenfest, seems to have taken one step forward with its biggest customer, the Pentagon, but has lost its accountant in the process.

The good news first. ETC says it has patched things up with the Navy and, as a result, the U.S. General Services Administration has agreed to remove ETC from its list of firms prohibited from bidding on U.S. government contracts. In exchange, ETC is implementing "a program of compliance reviews, audits and reports." The suspension followed a back-and-forth of lawsuits between ETC and the Navy and a guarantee from Lenfest -- a board member and one of the region's most admired philanthropists -- to pay some settlement fees. ETC did not explain the kinds of audits and reports that it must submit. But at least it can keep calling itself a defense contractor.

The bad news: The company also disclosed to the SEC earlier last week (which we missed at the time) that its accounting firm, Grant Thornton L.L.P., had "resigned" after finding out that it wasn't informed about some of the lawsuit notices from the Navy. ETC disclosed that Grant quit because "information came to Grant’s attention that has led it to no longer be able to rely on management's representations and has made it unwilling to be associated with the financial statements prepared by management." Whoa. ETC said it's looking for a new accountant. But better that, than having to survive without U.S. government contracts.

- Thomas Ginsberg

Michelle Leder at Footnoted.org caught this little item on tax gross-up payments for Ed Breen, the chief of Tyco International Ltd. who has a home in New Hope. She posted it last week and we just saw it. Better late than never ...

The teeth-gnashing and hand-wringing over executive compensation has some new ammunition from the Conference Board, which is releasing a report today that finds stock and other non-cash compensation for small-company chiefs, on average, is worth 11 times more than their salaries. That compares with 80 times more for big-company honchos. That essentially jibes with other studies.

But the board goes on to say these salary multiples mean that big company CEOs actually do have a lot of "skin in the game" with shareholders. Whether it's enough skin to make them shareholders' pain and truly links their pay to performance is another question. The board asks: "The amount of 'skin in the game' appears less dramatic if total holdings are looked at as a percentage of total compensation instead of as a multiple of salary, prompting the question: is salary the right denominator for measuring how much skin there is in the game?"

Speaking of CEO skin, the outsourcing firm CDI Corp. said an a filing to SEC last Friday that it has a new employment agreement with Roger H. Ballou, its president and chief executive, under which he will get $750,000 in salary next year plus stock and cash bonuses. It also says this: Ballou must hold at least $2.5 million worth of the company's stock by next December. Now that's skin.

- Thomas Ginsberg

Checkpoint Systems Inc. (NYSE:CKP) announced a change in CEOs two days after Christmas. But it wasn't the only company to switch CEOs in the merry month. Liberum, which tracks changes in CEOs and other C-level execs, said 224 changes were recorded in the CEO position during December, including Citigroup and Coca-Cola. For the fourth quarter, 664 changes were made at the top, compared with 611 for the same period of 2006.

When the CEO of a public company leaves, it's easy to measure what he or she meant to it: Watch the stock price. If it goes down, investors may be worried they lost a good manager. If it rises, they're often betting a new regime will turn things around.

Target Corp. named a new CEO Wednesday, and the retailer's stock price rose. Starbucks switched top barristas Monday night and its shares spiked 8 percent the next day during a down trading session.

Yesterday, Teva Pharmaceutical Industries Ltd.'s top U.S. exec left to take a senior post at Cardinal Health Inc.

Both companies operate in the Philadelphia area. Teva, the world's biggest generic drug maker, has its North American headquarters in North Wales and a manufacturing plant in Sellersville. Cardinal has a drug distribution center in South Jersey.

The reaction? Teva's American depositary receipts fell 4.5 percent, or $2.24, to $47.41. Cardinal shares rose 3.6 percent, or $2.12, to $60.69.

Should reporters serve on boards of directors? Or editors, for that matter?

Pennsylvania American Water Co. in Hershey thought its board could use the outside perspective that a Pittsburgh television reporter would bring. So it named Jon Delano of KDKA-TV on Wednesday to its nine-member board. And the subsidiary of Voorhees-based American Water e-mailed a press release detailing the career path of Delano, “the station’s award-winning money and politics editor.”

KDKA's Web site says Delano joined the station full time in 2001 with a special emphasis on political analysis. He also hosts a weekly public affairs program called the KDKA Sunday Business page and writes a nightly feature called Money Minutes about financial tips.

All journalists are concerned with conflicts of interest or even the appearance of a conflict. In all the years of reading announcements of new board members of for-profit companies, I couldn't remember seeing a reporter serving on one.

After sending the water utility's announcement to KDKA to check its policy, I got an e-mailed response from news director John Verrilli, in which he said that station management was not consulted in advance of the board appointment:

"After Jon was made aware of the Station's concerns about the appearance of a conflict of interest, Jon has made the decision to resign from the PAW board effective today."