Groupon Inc., the popular local deals coupon site, named Daniel Henry, the finance chief of American Express Co. and Robert Bass, a vice chairman of Deloitte LLP, as directors in efforts to improve investor confidence.
New Appointments
On April 26th, Daniel Henry was appointed to replace Starbucks Chief Executive Office Howard Schultz, who announced he’d be leaving the Groupon family. In the meantime, Robert Bass is up for election approval during the annual shareholder meeting slated for mid-June. His approval will place in a role Kevin Efrusy, venture capital firm Accel Partners, will be vacating. The two new directors will lay a role on the Groupon audit committee, the company announced this week.
Touted as the largest daily coupon site, Groupon has been taking steps in its efforts of improving its financial governance following the “material weakness” it found in its financial controls. These shortcomings had resulted in much weaker fourth quarter returns in 2011. The announcement, despite its reassuring nature, resulted in a forty-plus point drop in its stock. Since then, several Groupon officers, directors and underwriters have been named in federal lawsuits filed in late April by investor Fan Zhang.
It’s a Good Thing
One analyst at Delray Beach, Florida group Benchmark Co., said,
It’s a good thing to enhance the financial oversight, given that we just had a very quick restatement.
That analyst, Clayton Moran, rates the stock a buy and doesn’t own it. He goes on to say,
You bring in two guys who appear to be experts in public-company financial accounting; that, you would think, is an upgrade. So, I think it’s a step in the right direction.
For some time, the coupon company had been looking to hire two – maybe three – new directors following the revenue restatement. It said it was seeking people with extensive knowledge.
“The change in board members is not about something being broken,” said Mellody Hobson, a Groupon board member and president of Ariel Investments LLC, in an interview with Willow Bay on Bloomberg Television.
The change in board members there is about a shift in opportunity both for those who are there and those who are coming in.
The Numbers
The Chicago based company saw its stock rise 1.5% to $10.87 at the close in New York. This follows an 11 percent decline reported the day before. The decrease, or at least part of it, has been as a result of Schultz’s plans going public. Appointed in early 2011, Schultz is credited with reviving the Starbucks brand. In fact, many say Starbucks was a company that was significantly lacking in a positive and proven business model. It seemed like the ideal solution for Groupon, which lost 47 percent of its this year.
Daniel Henry has been quite successful in his role as CFO of American Express. Brought on board in October 2007, he’d already been with the credit card company since 1990 as a comptroller. Before then, he was a partner with Ernst & Young.
Bass has been with Deloitte since 1982 and has served in the role as vice chairman of the firm since 2006. Bass is set to retire from Deloitte in June.
One More Revelation
Groupon also revealed, via a regulatory filing, its salary compensation scales for calendar year 2011. Its Chief Executive Officer, Andrew Mason, received a compensation package of $7,943 in 2011, down from $184,599 in 2010. Mason is one of Groupon’s largest shareholders, owning about 7 percent of the company, according to data compiled by Bloomberg.
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