March 3, 1999
Time Warner's Levin
May Reap Stock Bonanza
By EBEN SHAPIRO
Staff Reporter of THE WALL STREET JOURNAL
The chairman of Time Warner Inc., Gerald Levin, could receive a
one-time stock option award valued at $25 million this year, based on the
strong recent performance of the company's once-moribund share price.
Under a special plan approved by the board last March, Mr. Levin
receives the grant if Time Warner shares hit $72.06 within five years. But
because of the rapid acceleration in the stock just in the past year, there is
a buzz inside the company that Mr. Levin may get the windfall far sooner
than expected, possibly within months.
Time Warner stock has increased more than 70%
since March 18, 1998, the day Time Warner's
directors, as a strong incentive to raise the
company's stock price, granted Mr. Levin
700,000 "double or nothing" stock options. The
options allow Mr. Levin to purchase the shares for
half the target price, that is, $36.03 each; if the
stock fails to double in five years, the options are
worthless.
After climbing steadily for much of the past 12
months, Time Warner closed Tuesday at
$62.5625, down $1.1875, in New York Stock
Exchange composite trading, easing with the broader market.
Analysts say Time Warner has hit a plateau in recent weeks in part
because investors have been taking profits. But Merrill Lynch & Co. and
PaineWebber Inc. both have 12-month target prices in the mid-$80s for
Time Warner. Jessica Reif Cohen, an analyst at Merrill Lynch, wrote in a
recent report that "Time Warner appears poised for extraordinary growth,"
noting the company's across-the-board operating strength. |
