Friday, January 05, 2007

Is There a Judgment Gap at The Gap?

Herb Greenberg in his “Market Blog” writes a commentary entitled “Gap Gossip” about the possibility of The Gap Inc. selling Old Navy. He writes in part:

“Gap made it clear today that changes are likely at Old Navy and its flagship Gap brands, following disappointing sales results. CEO Paul Pressler made it clear that "with the active involvement of our board" the company is reviewing brand strategies of the two.”

I decided to read the recent Proxy Statement filed by The Gap Inc. related to its Board of Directors and wrote the following response to Herb Greenberg on his blog:

Herb,

I think it’s a very good idea to get the entire Gap Board of Directors involved in this crucial decision. Maybe they should bring their spouses to the meeting too.

After all there is a saying “behind every great man there’s a great woman.” For the female directors, “behind every great woman there’s a great man.”

They would not violate company policy as read in a Proxy Statement filed on May 9, 2006:

“We occasionally invite director spouses to accompany directors to Board related events, for which we pay or reimburse travel expenses. These travel expenses are reported as compensation to the director and are grossed up to cover taxes. All directors and their immediate families are eligible to receive discounts on our merchandise in accordance with the Gap Inc. corporate employee merchandise discount policy.”

Well I guess if they sell off a division they may lose some of their discounts on merchandise. Think that will impact their decision?

Respectfully,

Sam E. Antar (Former Crazy Eddie CFO & ex-felon)

My blog question and comment here:

Do you think this Board will retain the right of employee discounts as a golden parachute? Perhaps the right of employee discounts precludes any Board member the ability from rendering independent judgment. Sounds petty? People have done stranger things for less.