Market Talk

SAP agreeing to buy fellow software maker Sybase (SY) for $5.8 billion, prompts footnoted.org blogger Michelle Leder to sift through SY’s filings and look for any pre-merger signals.

Sure enough, a proxy last month reveals Sybase CEO John Chen would receive a post-deal payday of $30 million, with the bulk coming in stock options, restricted stock and stock appreciation rights. That number, which is based off SY’s closing price on Dec. 31 of $43.40, actually rises to $42M considering the premium SAP is paying, she calculates.

SAP will pay $65 for each Sybase share, a 56% premium on Tuesday’s closing price.

“Now, granted, Chen has been at Sybase for a long time, so while the number is a big one, it’s not nearly as offensive as some other deals we’ve seen where a newly installed CEO collects millions for a few months on the job,” Leder says. She also notes CFO Jeff Ross and three other executives will make $8 million each from the deal, compared to $5.7 million detailed in the proxy.

Sybase shares were recently up 14% at $64.27; SAP down 0.8% at $44.56.

Don't expect any of this from Blankfein anytime soon.

Goldman Sachs’ (GS) decision not to previously disclose the fact that the SEC was investigating it for fraud is raising some eyebrows, especially as the firm’s reputation takes hit after hit.

Various reports suggest the SEC issued a Wells Notice to Goldman back in July 2009, with the Journal even reporting Goldman knew as far back as August 2008 that regulators were sniffing around its controversial mortgage securities.

But Friday’s bombshell left industry watchers perplexed as to why Goldman failed to disclose anything in the first place, especially since previous disclosures would’ve lessened the blow from last week’s civil-fraud charges.

“As with a lot of things in SEC filings, it all boils down to an issue of materiality: was the existence of the Wells Notice material enough to Goldman that it required disclosure?” Michelle Leder ponders at Footnoted. “The rules on materiality are pretty vague and it’s now clear that Goldman’s attorneys came to the conclusion that the Wells Notice was not material, even if the market seems to disagree.”

Given Goldman’s size and the relatively small amount listed in the complaint, she says it’s reasonable to understand why Goldman wouldn’t consider the Wells Notice material.

Still, she notes GE, Bank of America (BAC), UBS, JPMorgan (JPM) and Berkshire Hathaway (BRKB), which are all over $50 billion in market cap, have all disclosed Wells Notices in the past.

“If disclosing a Wells Notice was material enough for these companies, why was it not material enough for Goldman?” Leder wonders.

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