TAYLOR, MI - Cabinets manufacturing giant Masco saw its $400 million debt offering fully subscribed this week.
Fitch Ratings assigned a 'BB' rating to Masco's latest offering of $400 million senior notes due 2022, says analyst Robert Rulla. Proceeds of the new issue are to be used for general corporate purposes, including repayment of part of Masco's $791 million senior notes due on July 15, 2012.
Separately, Masco has become the target of an attempted investor rights action initiated by Faruqi & Faruqi, a New York law firm specializing in such actions. Faruqi & Faruqi said in a statement at www.faruqilaw.com/MAS "the investigation focuses on whether certain officers and directors of Masco violated shareholder protection laws by paying executives excessive compensation."
Faruqi & Faruqi specializes in such actions and is compensated by becoming court-designated counsel to the litigants. The firm is currently initiating similar actions against Aon, Penn Virginia, and Huron Consulting Group, among others.
The Faruqi & Faruqi complaint says that Masco’s CEO earned a total of $10.058 million in 2010, its CFO $2.45 million, and its COO $4.847 million, increasing as Masco’s 12 months total revenue declined from $11.413 billion in 2007 to $7.592 billion in 2010 and Masco suffered a net loss of $1,043 million in 2010. "Not surprisingly, Masco’s shareholders expressed their displeasure with the executive compensation packages by voting 'no' on Masco Corporation's say on pay provision, yet the Masco Board of Directors ignored both Masco’s shareholders and the Company’s past performance and approved the executive compensation referenced above."
Fitch Ratings' Rulla was not aware of the Faruqi effort, but said, "We are taking things like this into account when we make our evaluations of companies."
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