Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : CMGI What is the latest news on this stock? -- Ignore unavailable to you. Want to Upgrade?

To: James Thompson who wrote (14324)	11/24/1999 7:07:00 AM
From: John Carragher	Read Replies (1) \| Respond to of 19700

ech Center CMGI's CEO Received $56.5 Million In Tech Stock as Part of Compensation By JOHN HECHINGER Staff Reporter of THE WALL STREET JOURNAL CMGI Inc. Chief Executive David S. Wetherell, reaping the rewards of shrewd investments, received $56.5 million in shares of hot technology companies as part of his 1999 fiscal year compensation. If he held on to the shares, they would be valued at $108 million today. CMGI, based in Andover, Mass., invests in Internet start-ups, and Mr. Wetherell received shares of Web highfliers Lycos Inc., Yahoo! Inc. and Amazon.com Inc. The stock distributions are detailed in the company's new proxy statement, which reviews executive compensation for CMGI's 1999 fiscal year, ended July 31. The document demonstrates the lucrative nature of CMGI's unusual compensation structure, in which Mr. Wetherell gets paid as a venture capitalist as well as a corporate executive. Mr. Wetherell is a partner in CMGI-related venture-capital funds that manage Internet investments for the company and other investors. When those investments pay off, Mr. Wetherell and other partners receive from 20% to 22.5% of the profits, typically denominated in the shares of the companies CMGI seeded. Although such payments are customary in the world of closely held venture capital concerns, they are rare for CEOs of publicly traded companies. In July 1999, adjusted for stock splits, the company distributed 347,473 Yahoo shares and options to Mr. Wetherell. At the end of that month, they were worth $47.3 million and would now be valued at about $77 million. The shares came from Yahoo's stock purchase of GeoCities, a CMGI investment. In September 1998, Mr. Wetherell received 478,276 shares of Lycos valued at $8.1 million at the end of that month and about $28 million today if not sold. And, in November 1998, he received 35,010 Amazon.com shares valued at $1.1 million then and about $3 million now. The venture fund received the Amazon shares when the Internet bookseller bought Sage Enterprises Inc., a CMGI investment. It isn't known whether Mr. Wetherell sold any shares. Mr. Wetherell referred questions on the matter to Andrew J. Hajducky III, CMGI's chief financial officer and also a partner in the venture funds. Mr. Hajducky said he didn't know whether Mr. Wetherell sold any shares and considered that information "a personal matter." Mr. Wetherell could also receive payments from another arrangement, newly disclosed in the proxy. The partners in the investment funds charge their clients, both CMGI and outside investors, an annual fee for managing their money -- also a typical set-up for venture funds. That fee is either 1% or 2%, depending on the stage of the funds, according to the proxy and company executives. Mr. Hajducky said he expected several hundred million dollars to be invested in the funds. Mr. Wetherell is entitled to keep 28% of the management fee, after expenses, the proxy says. Mr. Hajducky says the management fee is designed merely to cover the fund's operating costs, so partners aren't expected to receive any money. He said Mr. Wetherell hadn't received any cut of the management fees in the 1999 fiscal year. Mr. Wetherell also gets a salary and bonus -- $427,642 in 1999 -- and stock options. He received no CMGI stock options in 1999 but exercised previously granted options to buy 94,112 CMGI shares to realize a gain of about $2.4 million. In addition, Mr. Wetherell owns 17.8 million shares, or 15% of the company, valued at about $2.5 billion.