Sunday, August 17, 2008

Co-Founders of Chindex Int'l Call China "Home Sweet Home"

Roberta Lipson, chief executive and co-founder of Chindex International (CHDX-$13.19), epitomizes the mindset of named executive officers—deriving personal benefits at common stockholders' expense. The medical products company, which distributes medical devices and instrumentation (such as diagnostic imaging equipment) to hospitals throughout China, reimbursed Ms. Lipson $74,371 for tuition expenses for her two sons in China—up from $39,400 in the prior year—and $70,000 for family housing expenses, according to the company's Proxy Statement filed with the SEC on August 12, 2008.

Granted, it is common practice in employment contracts to pay the expatriate's living and/or housing costs while the employee is living abroad.

Albeit the company’s administrative and executive offices are located in Bethesda, Maryland,
Roberta Lipson is an atypical expatriate. The 10Q Detective notes that Lipson has called China her home since moving to the Far East in the late 1970's. Her staying in China had already been built into her work-life equation when she co-founded the company in 1981. Why then the need for an additional $134,000 in annual "all other compensation?"

Co-founder Elyse Beth Silverberg also received a housing allowance and "home leave" expenses of $60,000 and $10,000, respectively, for fiscal 2007, as guaranteed in her eight-year employment agreement. (Child tuition reimbursements were afforded to her, too, in past years).

Roberta Lipson and Elyse Silverberg beneficially control 20.6% and 12.8 percent, respectively, of the total voting stock in the company.

Editor David J Phillips does not hold a financial interest in any stocks mentioned in this article. The 10Q Detective has a Full Disclosure Policy.

1 comment:

TopForeignStocks said...

Agree. Expats need those housing and living while living abroad since they need since they need good quality stuff in the country where they are located.However Ms.Lipson's tution expenses for her sons almost doubled this year. I am not sure if tuition costs doubled in a year or if it includes additional expenses related to education.