{
  "docId": "019dd923-622c-750b-8b98-b531f2b0553d",
  "docSlug": "c54d9b8bb206",
  "documentTitle": "Verint Systems, Inc. (VRNT)",
  "authorId": "54_Spruce_Point_Capital",
  "authorName": "Spruce Point Capital Management",
  "documentKindSlug": "activist-deck",
  "documentKindLabel": "Activist deck",
  "sourceTypeSlug": "short_seller",
  "sourceTypeLabel": "Short seller",
  "presentationDate": "2019-05-23 00:00:00",
  "orientation": "landscape",
  "aspectRatio": 1.3333334,
  "pageNumber": 70,
  "pageCount": 108,
  "prevPage": 69,
  "nextPage": 71,
  "slideType": "expose_contradiction",
  "function": "expose_contradiction",
  "density": "dense",
  "nDataPoints": 20,
  "notes": "The slide uses a table to demonstrate the quantitative impact of contingent consideration reversals on Non-GAAP EBITDA and EPS.",
  "elementsJson": [
    "headline_text",
    "paragraph",
    "data_table",
    "callout_box"
  ],
  "metadataConfidence": 1,
  "imagePath": null,
  "slideHref": "/slides/019dd923-622c-750b-8b98-b531f2b0553d/70",
  "deckHref": "/decks/019dd923-622c-750b-8b98-b531f2b0553d",
  "deckJsonHref": "/decks/019dd923-622c-750b-8b98-b531f2b0553d.json",
  "deckAnchorHref": "/decks/019dd923-622c-750b-8b98-b531f2b0553d#slide-70",
  "components": [
    {
      "bbox": {
        "h": 0.06,
        "w": 0.9,
        "x": 0.05,
        "y": 0.88
      },
      "kind": "callout",
      "text": "How convenient that management writes down contingent consideration liabilities as though it overestimated the performance of its acquisitions, while at the same time demonstrably underrepresenting their likely revenue contributions...",
      "attrs": null,
      "subkind": "primary",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "43574357-bb52-4743-8399-701c5897bac5",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": null,
      "kind": "metric",
      "text": "Non-GAAP EPS: $3.18",
      "attrs": null,
      "subkind": "primary",
      "toolName": "Quantification",
      "toolSlug": "quantification",
      "confidence": null,
      "componentId": "019dd953-2b65-734e-a973-98bada7d4191",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.12,
        "w": 0.9,
        "x": 0.05,
        "y": 0.17
      },
      "kind": "paragraph",
      "text": "As noted earlier, management has been taking large write-downs of contingent consideration liabilities related to M&A. This reveals that acquisitions have underperformed against initial expectations, and suggests that the deals were perhaps ill-advised. Yet, because contingent consideration write-downs translate to reductions of SG&A on the income statement, these write-downs are a benefit to operating income, and therefore increase management's performance metrics against compensation targets. Why should management get credit for the underperformance of its acquisitions? Why are contingent consideration reversals not adjusted out of operating income for compensation determination purposes?",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "e9f9503e-0af1-4a7d-ba30-5b3f84d7238d",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.45,
        "w": 0.56,
        "x": 0.22,
        "y": 0.35
      },
      "kind": "table",
      "text": "Annual Contingent Consideration Reconciliation table showing FY18 and FY19 adjustments to EBITDA and EPS.",
      "attrs": null,
      "subkind": "data",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "ae766061-4fef-4f11-8dfd-9434058a7971",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.06,
        "w": 0.55,
        "x": 0.305,
        "y": 0.03
      },
      "kind": "title",
      "text": "Management Compensating Itself For Poor M&A?",
      "attrs": null,
      "subkind": "headline",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "bb0be6e6-3ab2-43af-8921-91c27590c558",
      "frameworkName": null,
      "frameworkSlug": null
    }
  ],
  "metrics": [],
  "tools": [],
  "frameworks": [
    {
      "name": "fraud-exposure",
      "slug": null,
      "matchId": "034e606e-7152-4970-ab94-4f65d621a3ea",
      "evidence": "The slide explicitly links accounting adjustments (contingent consideration reversals) to management compensation incentives.",
      "confidence": 0.9
    }
  ],
  "arcBeats": [],
  "loops": [],
  "imagePathAlt": null,
  "thumbSrc": null,
  "thumbSrcAlt": null,
  "locked": true
}