In a note yesterday, Raymond James analyst Dan Wewer said “management could have been more forthcoming” on its earnings call — during the call there was no mention of the investigations, little explanation of Fishman’s retirement and only passing acknowledgement that its better-than-expected quarterly results were partly thanks to an executive compensation change:
It turns out that most of the EPS beat was from this change in share-based incentive compensation. During F3Q12, Big Lots reversed the incentive compensation accrual taken earlier in the year – adding $300,000 to operating profit, compared to an expense of $6.2 million a year ago. Based on the 36% effective tax rate during F3Q12, this swing in compensation accrual ($6.5 million) approximates $0.07 per share. It is our understanding that a large majority of this share-based incentive compensation goes to CEO Steve Fishman.