SEC FORM 4.

Pursuant to the pre-determined trading plan, Salary.com CEO and largest shareholder Kent Plunkett purchased 2000 more shares on the open market.  He has done at the beginning of the month since March.

So for those of you keeping tack at home, that’s equivalent to 24,000 share per year or about $72,000 at $3 per share.  Impressive!  Ok, so not really impressive.  It’s basically pocket change, if he really had conviction that the shares were undervalued, then I suspect he would be buying more than 2k shares per month.

And maybe he would if not for the fact that he’s given so many shares, why is there any need to buy them himself?  On October 15th, Salary.com gave out ~315k shares (about 2% of the company) to 12 insiders and directors.  120k of these shares, or about 38%, went to a single person, that being Mr. Plunkett.  Clearly he doesn’t want to dilute his own ownership (as he shouldn’t!), I just wish he’d go about it differently — like by not issuing so many shares instead of grabbing more himself.

I had hoped that with the addition of William Martin to the board of directors, they might rein in dilution, however that does not appear to be the case…

Salary.com reports tonight, we’ll see if anyone asks him about it.

Disclosure: Long SLRY.

The HR Capitalist: HR Tech Rundown: Observations on the Talent Management Shootout from the Capitalist….

Details are available at the above blog.  I’m starting to see the benefit of twitter as I found that post by searching for #HRtechconf on twitter.com.

But, for some background, the HR Tech Conference has a contest between vendors, in real time, where attendees vote for who has the best software.  Here’s the details from http://www.hrtechnologyconference.com:

Our 13th Shootout – and signature event – will be an epic software battle now that two ERPs – Lawson and SAP – have agreed to go up against two Talent Management suite vendors – Plateau and Salary.com. For years, the smaller suite vendors have sold new customers by contending the ERPs’ applications for Talent Management are not as functionally rich or as integrated as theirs. While at the same time, ERPs like SAP and Lawson have been furiously building out and integrating their applications to meet that challenge. Now you can finally find out who was right, at least among these four. Each vendor will tackle a scripted scenario of problems – like those your managers and employees face every day – and show in live custom demonstrations how their software can help solve it. Leighanne Levensaler, Director of Talent Management Research for Bersin & Associates, will co-author the script, as she did the previous three. This one session will save you months of research and sales pitches. Come watch, listen, learn and then vote for your favorite.

I bolded that sentence, but seriously, winning this thing has to be a pretty big deal.  There were 3 scenarios  (individual performance, merit distribution and succession planning) and each segment was won by Salary.com.  The above blogger seems to think that Salary.com won despite a poor presenter, so that speaks even more for the quality of the product.

Note that this is a talent management product, not a compensation product, so this is quite impressive for Salary.com.  Hopefully many of the attendees will sign up for the Salary.com solution!

I wanted to point out a few other “tweets” from #HRTechConf that referenced salary.com:

kris_dunn Salary.com – had no idea they had all that under the hood….

kris_dunn Interested to know the cost of the salary.com solution vs the big boys. Lots of stuff…

@wiseconsulting Salary.com kicks major butt at the shoot out. Should have won it last year too. Congrats!

johnsumser Salary.comwins the Talent Management Shootout at #HRTechconf. Amazing. Inflection point.

ronhanscome #hrtechconf Note to all vendors: Screens are small with lots of text for viewers, only Salary.com solved this with cool ‘zoom-in’ capability

stelzner Hate to focus on this but Salary.com UI is also a bit lacking

karenbeaman Salary.com needs to change their name. [3 people "retweeted" this and agreed]

So overall, I think the conference was quite positive for Salary.com.  What’s not so positive for the share price is the second largest holder, Kinderhook Partners, filed last Friday and they have been selling their shares over the past month.  They’ve unloaded about 200k shares; if they continue to sell it could hold the share price down for a long time.  They seem to not sell below $3, however, so it doesn’t appear like they’ll drive the price down with their selling.

Disclosure: Long SLRY.

Two quick updates on Salary.com – first on their last earnings report and secondly on the recent trading volume.

Salary.com reported Q109 Earnings back in August, and they were slightly better than I had been expecting.  It was their 33rd straight quarter of sequential revenue growth and they managed to be operating (and free) cash flow positive a quarter sooner than I had been expecting.

What surprised me most was that strength in the quarter came from Advertising revenue, as it increased to $913k, an increase of 18% from Q4 and 46% from last year.  Management attributed the strength to redesigning some aspects of the home page which now require multiple page loads which shows more ads to the same number of people.

The one potential negative was that subscription revenue declined from the prior quarter, the first time that’s happened.  This continues a trend that started in Q3 last year, and is definitely something to watch.  Management claims that this is simply a timing issue with some deals delayed and not being able to recognize support/installation revenue associated with those deals, so if this is the case, it should bounce back rather nicely next quarter.  This is something I’ll be watching.

Continue…

Acquisition Outlook: Intuit, ADP | Sramana Mitra on Strategy.

Blogger, Author, and Forbes Columnist Sramana Mitra suggests that Salary.com could be a good fit for ADP.   I agree with this since ADP and Salary.com already have a partnership where ADP resells SLRY’s products.  According to the last SLRY conference call, the partnership was expanded and moved out of “beta” so more ADP sales people will be involved.  Apparently only a handful of ADP sales people sold SLRY’s products to over 100 new customers during the June Quarter.

Disclosure: Long SLRY.