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Panera Bread Company Message Board

  • Jacklez Jacklez Jan 3, 2003 10:40 AM Flag

    COLI comment

    Not sure what to make of Panera's "mortality income receivable" except to say that most public companies insure their employees, including big buck policys on top executives. It's perfectly legal. Panera hasn't kept it a secret and they've been doing it for about 6 years. It might expose them to lawsuits as is the case with WalMart, who are being sued by a destitute widow for the life insurance $$$ the company collected on her former husband's death a few years back. But I don't think that Panera's CEO looks at the accounting and declares to the Board, "Hey, gang, we're not going to make our numbers this quarter. Don't just sit there, get out and kill someone!"

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    • Do you really think PNRA is capable of $.99 without 'pushing it to the limit'?!? Think of the pressure being placed on the current mgmt team to 'make it'. Funny, this pressure didn't exist when no one, and I mean NO ONE, knew PNRA existed. What did PNRA do? -- handily outperform low expectations (the fun days, and the days when real meaningful gains occurred). Now in its life cycle, its solidly in that part of the risk/reward cycle where one slip up and Cablooey......I could see PNRA pushing it, just didn't know that the 'janitor insurance' accounted for so much of the Company's operating earnings (if the WSJ article is right). On second thought, if the WSJ article is even HALF RIGHT, PNRA has valuation problems -- each of your last 3 posts have IMHO addressed this and been 110% right on.....

      "If the .99 is real, I remain bullish...." My friend, you will NEVER really know the answer to this qualified statement.....Even with hindsight it's tough. That's why 'quality of mgmt' is absolutely key. The big kahuna (& friends) are dumping -- that speaks volumes to me.....Hope your call premiums are enough to outweigh any significant downside risk.......All JMHO....Good luck to all.....

    • While morbid, don't be so sure. Actually Shaich & Gang have been doing much better than what you propose! How about knowing from the inside that PNRA's REPORTED numbers have been 'juiced,' sitting back 'laughing' (actually, being astonished) while the market puts an unsightly multiple on non-recurring earnings ----- oh & the key ingredient --- sell 'performance' options en masse a 'little' at a time to attempt to avoid the Fastow-scenario. HHmmmmm. The question is, even if one can get away with it, do the ends justify the means??? IMO look for an 'unexpected charge' sometime soon. All JMHO....Good luck to all.....

      • 1 Reply to valuemonster_jurel
      • Would any of you be as upset with PNRA, if the income were from investment of previous earnings in tax-free bonds that paid better than market rate? I think probably not.
        Sounds to me like that is exactly what is going on here. If you are a company and you have a large amount of cash, unless you are really stupid, you invest it. The only question is, where do you put it? One thing that you can do, is buy a life insurance policy. The insurance company puts your money in the market, it grows, and when you get paid back, it isn�t taxed as dividends or capital gains, it�s taxed as life insurance proceeds. Not being a tax expert, I don�t know the corporate rules, but for individuals, the proceeds are not taxable.

        So really the question is whether or not it is a terrible thing to have 25% of your income from interest on money you�ve made in the past.

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