Callaway Analyst: "Apparently, now shareholders must simply be expected to pay management regardless of the level of performance.”

My Golf Spy posts analyst Casey Alexander (Gilford Securities) take on the Callaway's brass compensating themselves even as the company underperformed the last two years.

“Immediately after the earnings were released management was not only awarded a significant package of equity stock options that priced lower because of the lousy earnings (For instance, CEO Fellows priced 544,162 shares exercisable at $7.51), but then management was awarded another block of Phantom Stock Units. The Phantom Stock Units were initially created last year as a device to retain management because management was incapable of actually earning their bonuses through performance, and if the Board of Directors didn’t give them more compensation, they might be lured away to other companies. This year, they threw them the Phantom Stock Units without any explanation regarding retention. The CEO received Phantom Stock Units totaling 213,049 shares, which represents a market value of $1.6MM of additional compensation. Apparently, now shareholders must simply be expected to pay management regardless of the level of performance.”