"Now, are you saying that they were issued options at below FMV? "
Not at the time of issue. But the stock spent considerable time below its current value where more options could have been granted. Of course, some of the options being exercised could be near their 10 year expiration point... but I hate to see insiders selling more shares than they own in total
Here we have Peter Blackmore, Exec VP, listed as holding ONLY 50,984 shares while it appears he has sold roughly 180,000 shares over the past year.
biz.yahoo.com
finance.yahoo.com
26-Feb-04 BLACKMORE, PETER Executive Vice President
79,062 Option Exercise at $15.31 per share. $1,210,439
26-Feb-04 BLACKMORE, PETER Executive Vice President
79,062 Sale at $23.1002 per share. $1,826,348
My guess is the options exercised between 7.59 and 12,34 would include some options that were about to expire, but he sold them all the same day at $21.72.
IF I am going to give insiders "incentive" to make my stock go up, then I want them to KEEP the stock shares we use as incentive to demonstrate it is a good, long term investment.
To Carley's credit, she has NOT been selling shares
biz.yahoo.com
and it looks like she was given a direct grant of 352,289 shares or she has bought them herself.
I think giving restricted stock and booking the expense on the date granted is the way to go.
When I worked at HP for 20 yrs, the way for engineers to get rich on options was to quit the company where we'd exchange a "safe paycheck" for a "risky paycheck plus equity options" at a start-up where we gave up longer term security for the chance to hit the lotto. It often meant working 60 to 80 hr weeks and 80% failure rates at a lower salary to boot.
The way I see it, the major US corporations have made it so the insiders hit the lotto every year without having to take the big risks. This needs to stop and if it requires expensing of options, then I am all for it. |
