A Newell Brands spokeswoman declined comment, but cited a regulatory filing made by the company Friday. In that filing, the company noted that it had cooperated with the probe. “The company has neither admitted nor denied the SEC’s findings, and the settlement does not name any of the current executive officers of the company.”
Polk was CEO for eight years starting in mid-2011. Attempts to reach Polk were not immediately successful.
The charge involved “misleading” public reporting of the company’s earnings, according to the SEC.
Knowing that an accurate report of its earnings would have disappointed investors, the company boosted its numbers during four successive quarters. With the approval of then-CEO Polk, the company’s public reports “pulled forward sales from future quarters,” adding some luster to the company’s financial performance, the SEC said.
During the four quarters in question, the company showcased what it called “core sales growth” and “core sales,” which Newell described as giving investors “a more complete understanding of underlying sales trends.”
The “actual underlying sales trends” varied from the company’s reports, the agency said. Newell did not reveal that the publicly-disclosed “core sales growth rate” was higher than it would have been without that decision to “pull forward sales,” the SEC said.
“Internal communications during this period recognized that Newell’s sales were disappointing and had fallen short of management’s goals,” according to the SEC.
According to the SEC, the fine was limited to $12.5 million because the company cooperated with the investigation.
If the SEC learns, however, that Newell “knowingly provided materially false or misleading information or materials,” it can reopen the investigation and require a larger penalty.
Newell has about $8.5 billion in annual sales and about 28,000 employees around the world, according to its website. The company owns a number of other well-known product lines, including Crockpot, Marmot, Papermate, X-Acto, Oster, Elmer’s and Calphalon.
The company’s stock peaked at $53.08 a share in June 2016, nearly hitting that mark again in March 2017. After that, the price began sliding. The stock rallied in 2021, reaching $28.69 a share in March, then again declined.
Shares of Newell were trading at about $9 in early afternoon Friday.