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Executive Compensation

Concord Camera Corporation (NDAQ: LENS) is facing some sharp criticism from dissident shareholders as it continues to report quarter after quarter of losses. The Everest Special Situation Fund, which owns a 6.06% stake, demanded that management immediately take action and pursue a sale or liquidation process.

Concord's existing special committee has twice failed to propose strategic alternatives after citing two different approximate dates to its shareholders in official filings. Worse, itnow says that it will not make a recommendation until the company achieves improved liquidity of its auction-rate securities.

Meanwhile, management continues to run Concord into the ground with 17 consecutive quarters of losses while paying large sums of money for executive compensation. Meanwhile, management has shown a poor 10.7% gross margin despite manufacturing in China, which should have reduced production costs significantly.

On top of all this, despite the company's continuous negative cash flows from operations, the board and management have decided to invest a large majority of its cash, cash equivalents and marketable securities in auction-rate securities, while failing to manage the business risk for shareholders.

Everest has offered its help to Concord in the past, but the company turned down any help from outside directors. The hedge fund is now recommending that Elchanan Maox, CEO and general partner of Everest, be appointed in order to help the company quickly pursue a sale or liquidation before value gets even more eroded.

Everest ended its letter by stating that they would be happy to meet in the near future, but will not wait much longer before taking action, as they have done in other circunstances when such action was necessary. Presumably, this means a proxy battle if they do not get a response.

Concord Camera Corp. shares are even in early trading.

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