Amazoncom Executives Swap Options for Better Terms
Washington, April 13 (Bloomberg) -- Amazon.com Inc. said four senior executives swapped their stock options for grants of fewer shares carrying a lower exercise price, after the No. 1 Internet retailer's stock tumbled 80 percent last year.
The new options have an exercise price of $13.38, compared with strike prices of at least $30.88 on grants received last year by Chief Financial Officer Warren Jenson, international chief Diego Piacentini and two others managers, according to a proxy filing with the U.S. Securities and Exchange Commission.
Amazon.com announced the option-exchange offer in January to retain employees whose grants would otherwise be worthless. The new options include fewer shares and can only be exchanged for old grants with a strike price greater than $23. Shares of Seattle- based Amazon.com rose $1.35 to $14.67 yesterday.
``Ouch,'' Chief Executive Jeff Bezos wrote to start off his annual letter to investors, which was included in a separate filing today with the SEC. ``It's been a brutal year for many in the capital markets and certainly for Amazon.com shareholders.''
Under the exchange program, Jenson received an option to buy 346,667 shares. Mark Britto, head of cross-site merchandising, got an option to buy 239,998 shares. New options for Piacentini and operations chief Jeff Wilke covered 240,000 shares apiece.
A quarter of each new grant becomes exercisable on Aug. 14, followed by another 4.17 percent monthly until fully vested on Feb. 14, 2003. The grants expire Sept. 30, 2003, the SEC filing said.
`Stronger Position'
Before the swap, Jenson had outstanding options for 100,000 exercisable and 2.18 million unexercisable shares. Britto had 920,000 unexercisable shares; Wilke, 60,000 exercisable and 1.17 million unexercisable shares; and Piacentini, 830,000 unexercisable shares. Those options were nullified by the swaps.
Bezos drew a salary of $81,840 last year, according to the proxy. As in previous years, he requested no additional pay. Bezos founded Amazon.com in 1994 and owns 32 percent of its stock.
In his letter to shareholders, Bezos said the company was ``in a stronger position now than at any time in its past,'' even with the decline in the stock.
``As the famed investor Benjamin Graham said, `In the short term, the stock market is a voting machine; in the long term, it's a weighing machine,''' Bezos wrote. ``Clearly there was a lot of voting going on in the boom year of '99 -- and much less weighing. We're a company that wants to be weighed, and over time, we will be -- over the long term, all companies are.'''
Apr/13/2001 17:30 ET
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