It's already quoted in full in bullrider's post (#345). The only additional info not posted here is that the author's alias was "ceotips", and there are no particular clues to his identity.
But since I'm posting, here's a response, followed by the original author's follow-up, both of which are also of interest.
======== (Reply by "sparkee") ===========
After reading the "nepotistic" article from "ceotips" I decided to call
Labor Ready. I left a brief message concerning the message and later
this afternoon Glenn Welstad, company CEO, returned my call.
He said he'd seen this thing several times recently, once from an
analyst in California who follows them, from a Tacoma News Tribune
reporter (who has reported positively on the company in the past), etc.
He feels quite sure, from wording and some things that only one
individual would be likely to know, that this "tip" comes from an
ex-employee.
Welstad and I talked about 15 minutes, he was very open and offered to
answer any questions I would have. While he could have been blowing
hot air, I don't think so.
I asked about several things in the message:
I already knew that his son Todd was MIS officer (from the annual
report) -- Welstad noted that Todd's salary was nowhere near the $152,000
quoted. He agreed that Todd didn't have a degree, but that his knowledge
of thesesystems was good and that an independent consultant had given their
system high marks. He said Todd had been going to school part-time (by
correspondance) and that he puts in 60+ hours a week at Labor Ready
(ceotips stated Todd's now absent 3 days a week to attend classes).
Welstad said his son Eric is not employed by the company, but is going to
college in San Diego (ceotips said he had a job title of special projects
which he was given after failing at several other positions).
Ceotips said his wife is director of employee benefits with $65,000 salary
and worked about 6 days a month (Welstad said his wife had from the
first days of the company done payroll, most of that time at ca. 12,000/yr).
Ceotips also stated that Welstad's wife had recently stepped down and that
his neice was now doing the job (Welstad said that his wife had stepped down
and his niece was employed by the company, but in a secretarial position).
I could go on, but there was enough to make me question ceotips and his/her
statements.
Further, ceotips hasn't signed his/her name.
I'd love to hear more from others, but particularly from ceotips,
including his/her name and whether he/she has ever been
employed by Labor Ready. Also, where this information came from.
Waiting for more...
Richard Sparks
============ (Followup by "ceotips") ===========
Your response to the nepotistic message reaffirms the need for this type of forum. Obviously you believe you made the right decision when you purchased your Labor Ready stock. I would hope that you did not purchase it with the intent to lose money. However, other investors may want a broader view of the company than that of the CEO, who has an extremely personal stake in the market's perception of the company.
Now, with regards to your response: #1) The fact that Todd Welstad's salary was quoted wrong does not effect the validity of the CIO promotion, which is public record and appears in the annual report. So what if he earns $120,000 or $130,000,a year instead of $152,000, the nepotistic nature of the promotion is still valid, and continues to support the argument that the CEO's decisions are clouded by this very deep personal relationship. From an investor's point of view, they have a right to know the quality of the team that is charged with managing their capital investment. Any reader of CFO magazine knows the required qualification for the senior level position Todd Welstad was given. Again, it is the investor's choice whether this information is material. Now, with regards to the fact that Todd works 60+ hours a week, so what! So do scores of other Labor Ready employees, many with advanced education and professional credentials! Why are they not given officer titles and six figure salaries? Also, I think it is a bit ludicrous to ask a father about the value of a son. I have four kids whom I love very deeply. There is no way I would run them down to a stranger. Also, if Glenn Welstad wants his son as CIO of Labor Ready, that is his choice, but again the investor also has a right to take the quality of the senior management team into consideration when "putting up the money". If an investor chooses to believe Todd Welstad's promotion was based on merit and is the best their money can buy, so be it.
With regards to Eric Welstad, I agree it is probably gossip regarding his relationships, but then again someone could call, not the father, but a Labor Ready office in San Diego and ask about Eric Welstad. The fact of the matter is he was given the job of Assistant DM and failed. However, if someone wanted to check the validity of this statement a call to Mike Ingham, who is the DM in the San Diego area, would settle the issue of the veracity of this statement.
As far as the statement about Donna Welstad and the niece, I am standing on it. I have a copy of the e-mail which announced Donna Welstad's departure, and the promotion of Mindy Ringdahl, who is Glenn Welstad's niece, to handle the employee benefits. So sparkee was not told the truth. The other niece, who was aloud to float from department to department, was Tracey Keator, Her mother is Linda Keator. Linda Keator is Donna Welstad's sister, which would make her Glenn Welstad's sister-in-law. Linda Keator is also the District Manager of Alabama and Mississippi. Tracey Keator was aloud to come and go as she pleased. She did adversely impact moral and did disrupt each department's work flow. This can be verified by contacting Bob Sovern, Keith Terrano, Paul Rieckers, Karen Higgins, Raynetta Combs, Nancy Mayo or Shellie Stewart at Labor Ready's corporate offices in Tacoma WA. Any or these individuals will also confirm the purpose of her float was to improve her self-esteem. Again, if Glenn Welstad chooses to utilize corporate assets in the above manner, that is his choice. However, investors have a right to know that that is how the company is run.
I have responded to the issues raised by sparks in his posting, which in my opinion are not the meat of the document which was picked up on the internet, not the world -wide-web. Number 1, it is a fact that the CFO was fired and did not choose "to go back east to be with his family". I find it amazing that 45 days after the sacking of the CFO, Labor Ready announces record earnings. Number 2, the statements about Ralph Peterson, Sr. and Ralph Peterson, Jr. are true. Why is it that Ralph Peterson, Sr. keeps his job after overseeing the stock price go from $19 a share to $6.50 a share as COO/CFO while everyone else in Labor Ready Inc. is getting axed? Is he a member of the board of directors who Glenn Welstad has in his pocket? I do not know? The statement about Glenn Welstad having undated letters of resignation from the various members of the board is true. It may not be true that there is enough conflict of interest on Labor Ready's board, to prevent it from exercising its fiduciary responsibilities, however circumstantial evidence supports the postings conclusions.
The statements concerning the bad debt reserves are true. No one will get a written denial from Labor Ready, about the reserves, just a no comment. Ask any of the operations people what is the company's credit policy and see what is the response. The statement regarding the abrupt change from two of the worlds leading insurance brokers to a small regional firm is true. If the CEO pulled the same stunt with its public auditors, investors would be screaming to high heaven. Yet, for some reason, since it is only the insurance brokerage services that were changed, it is not material. Apparently, "sparkee" does not appreciate the impact of workers compensation on the company's earnings.
The statements about John Coghlan are true. All of it is public record, except his behind the scene intervention in the management of the company, and his material contribution to the closing of the company books. Try and obtain a written statement of denial. Now, the institutional investors have the money to withstand another Discovery Zone type investment loss. If Putman, Janus, and Franklin/Templeton are satisfied with the current management that is fine, but the individual investor should wait until after the year-end close before risking capital.
Lastly, what appears to be happening, is that senior management believes, that it will be able to generate enough cash and net profit from operations, between now and year end, to enable them to: #1) Increase the reserves on the currently understated future liabilities, while at the same time announcing record earnings to generate a feeding frenzy of its stock by the market and: #2) Have the books clean enough to pass the more rigorous public audit they are expecting.
Lastly, there are reasons why I have not provided my name. Mostly, because the sources for this information would be harmed. All the statements can be verified by digging a little deeper into the public record, and they do support the circumstantial conclusions stated in this posting and the prior one. I would bet, that as time goes by other Labor Ready Inc., employees and vendors will verify this information.
Even if that does not happen, or that misstating Todd Welstad's annual salary is enough to impugn the rest of the material, all an individual investor has to do is put up their money and time will tell. |
