public.wsj.com
Nov 20,2000
CEO of CMGI Realized $102.5 Million
From Stock Options During Fiscal 2000
By Andrew Caffrey
Staff Reporter of The Wall Street Journal
CMGI Inc. Chief Executive David S. Wetherell, reaping hefty payouts just before a downturn in his company's fortunes, realized $102.5 million from exercising 2.4 million stock options in fiscal 2000, and received another $79 million in shares and options in other technology concerns as part of his compensation for that fiscal year. His total package for the year approached $184 million.
Reflecting the sagging fortunes of CMGI's stock as well as a broader decline in technology issues in recent weeks, the value of the 2.4 million CMGI shares Mr. Wetherell received by exercising the options has dropped to about $30 million. The shares and options he received in other companies would be valued at about $37 million if he continues to hold them today.
CMGI, Andover, Mass., operates Internet start-ups and runs several venture funds that invest in other technology companies.
The stock distributions are detailed in CMGI's proxy statement for the fiscal year ended July 31, which was filed with security regulators Friday.
In addition to being paid as an executive overseeing CMGI's operating companies, Mr. Wetherell shares in the profit of the company's @Ventures venture-capital funds. In the most recent year, his share of the @Ventures profit included distributions of stock in Amazon.com Inc. and in Web portals Yahoo! Inc. and Lycos Inc., now part of Spain's Terra Lycos.
During the prior fiscal year, Mr. Wetherell received about $56.5 million in stock in many of the same companies. But some of those, such as Yahoo, were trading at much higher values when Mr. Wetherell received his distributions during fiscal 2000.
The filing shows that Mr. Wetherell's salary, bonus and other compensation more than doubled for the fiscal year, to a total of $1.2 million from $562,136 the previous year. In addition, Mr. Wetherell received $842,000 in cash distributions, mostly from his role as a manager of the venture funds.
Mr. Wetherell and a CMGI spokesman didn't return calls seeking comment.
News of the hefty payments comes amid a crash in CMGI's own highflying stock, as the Internet incubator struggles to revamp its business model. The company reported a consolidated operating loss of $2.19 billion for fiscal 2000, including substantial goodwill write-offs, on revenue of $898 million. Trying to stem the losses, the company has cut jobs at several units and pared back its ambitions in some segments.
At 4 p.m. Friday in Nasdaq Stock Market trading, CMGI's shares were down 56 cents to $12.56. The company's shares are down by more than 92% from a high of $163.50 in January.
According to the proxy statement, Mr. Wetherell received distributions of Yahoo shares three times during the fiscal year as his share of the @Ventures profit. The total of 123,727 shares was valued at about $22.1 million, using Yahoo's price at the close of each month he received the shares.
In addition, Mr. Wetherell received 72,436 Yahoo options in October 1999, with an exercise price of about 65 cents. Yahoo stock closed that month at $89.53, giving the options a value of $6.5 million if exercised then.
It isn't known if Mr. Wetherell continues to hold all these shares and options. If he does, the Yahoo shares would have fallen in value to about $6.3 million, and the options, if exercised now, would be valued at about $3.7 million, based on Yahoo's closing price Friday.
Mr. Wetherell also received distributions of 547,375 Lycos shares in February, valued at about $32.6 million based on Lycos's closing price at the end of that month. If Mr. Wetherell continues to hold them (as shares of Terra Lycos), those shares would now be valued at about $18.4 million.
According to regulatory filings, Mr. Wetherell still holds the 2.4 million CMGI shares he received during the year by exercising options.
His total CMGI stake, as of Sept. 30, was about 36 million shares, or 11.2% of the company's shares outstanding.
Mr. Wetherell also was granted fresh options to buy 3.5 million CMGI shares during fiscal 2000. Most of those options -- 3.2 million -- were granted in May at an exercise price of $56.13, more than four times the current stock price.
In the filing, CMGI's compensation committee explained the option grant "as an incentive for Mr. Wetherell to continue providing the Company with first-class leadership."
Write to Andrew Caffrey at andrew.caffrey@wsj.com |
