E*Trade CEO Got $9.6 Mln in Fiscal Year, Granted 4 Mln Options
11/29/99 2:18:00 PM
Source: Bloomberg News
Menlo Park, California, Nov. 29 (Bloomberg) -- E*Trade Group Inc.'s chairman and chief executive got $9.58 million from salary, bonus and exercised stock options last fiscal year, more than double the $4.44 million he took home a year earlier.
Christos Cotsakos, 51, realized $7.92 million from exercising options in the year ended Sept. 30, up from $3.81 million in fiscal 1998, according to a proxy filing by the No. 2 Internet brokerage. He was paid $1.66 million in salary and bonus, more than double the $628,098 he received a year earlier.
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While Menlo Park, California-based E*Trade lost $54.4 million in the fiscal year, compared with a profit of $1.9 million the year before, its stock increased five-fold in the period, swelling the value of Cotsakos's options.
``He's got the best of both worlds: a salary and bonus like the CEO of an established, profitable company and the options of an Internet CEO,' said Graef Crystal, an executive compensation consultant. ``The stock has had an enormously good performance, but this package is exceedingly generous.'
It could get better. Under a new employment contract dated June 1, Cotsakos gets 4 million stock options and an unspecified ``special enterprise-value-enhancement bonus' if the company is acquired. The special bonus is based on any increases in the firm's market value since Aug. 12, according to the proxy.
That's the same date Cotsakos, 51, received the first 1.5 million options under his new contract, a day when E*Trade stock closed at 24 3/8. At today's price of 30 7/8, those options are worth about $10 million.
Options Value
He will receive another 2 million options by next September under the new agreement, and 500,000 in the 2001 fiscal year. The 2.5 million remaining options are worth at least $50 million even if the stock price stays the same, Crystal said.
Under the new three-year contract, Cotsakos receives an annual base salary of $575,000 and a bonus of up to $1.725 million. At Sept. 30, Cotsakos owned options worth $103 million, a 10-fold increase from $9.3 million a year earlier.
A spokesman for E*Trade said he had no immediate comment.
E*Trade's president and chief operating officer, Kathy Levinson, signed a four-year contract June 1 calling for a $425,000 annual salary and a bonus of as much as $680,000. Levinson will also get 1.25 million options in the current fiscal year.
She gained $15.8 million from exercising options in the past fiscal year.
In his three years as CEO, Cotsakos has become E*Trade's fourth-biggest shareholder. At Sept. 30, he owned 7.3 million shares, 3 percent of the outstanding total, worth more than $220 million.
Softbank Corp. owned 26.1 percent of E*Trade stock worth $1.94 billion. The Tokyo-based software company paid $400 million for those shares 15 months ago. |
