"Wave has an employment agreement with its President and Chief Executive Officer, Steven Sprague, which, among other conditions, entitles him to an annual bonus. The annual bonus is comprised of two portions: fixed and incentive. The fixed portion of the bonus is guaranteed and calculated to be equal to 50% of each year's annual salary. The incentive bonus payable for a given fiscal year for Mr. Sprague is typically determined by the Compensation Committee of the Board of Directors within 60 days after the close of that fiscal year. During March 2012, it was determined that due to a payroll processing error, Mr. Sprague was overpaid by $70,000. Promptly after the error was identified, Mr. Sprague repaid the Company.
In March 2003, Mr. Peter Sprague, who is the former Chairman of Wave, was appointed Chairman and Chief Executive Officer of Wavexpress. On January 1, 2010, Mr. Sprague became an employee of Wave. Mr. Sprague was paid a salary of $134,160 and $129,000 for the years ended December 31, 2011 and 2010, respectively. Mr. Sprague earned a $125,000 bonus for each of the years ended December 31, 2011 and 2010. Mr. Sprague was paid $129,000 in salary for the year ended December 31, 2009 as an officer of Wavexpress and he earned a $35,000 bonus. Mr. Peter Sprague is the father of Wave's President and Chief Executive Officer, Steven Sprague.
On August 1, 1997, Michael Sprague became an employee of Wave and was paid a salary of $189,280, $182,000 and $175,000 for the years ended December 31, 2011, 2010 and 2009, respectively. Mr. Sprague earned bonuses of $55,000, $35,000 and $-0- for the years ended December 31, 2011, 2010 and 2009, respectively. Michael Sprague is the brother of Steven Sprague and the son of Wave's former Chairman, Peter Sprague."
The error commentary flows immediately out of the bonus discussion, which contracts the timeline, in my view. Is my conclusion that the error is bonus-related the same one that anyone else arrived at? If the error is older, then I think it is a serious issue, as it should have dropped out of a payroll report.
I also note the bonuses for the Sprague relatives are noticeably increasing over the three years (from $35k in 2009 to $180k in 2011). Why are they receiving such substantial bonuses?
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