[Stock options awarded at a strike price of $3.75]
The company's shares recently traded for $4.65, up 24%, after soaring nearly 40% on Thursday, when Ariel Capital Investments of Chicago disclosed it had become Gannett's second-biggest stockholder. (Markets were closed for Good Friday.) Earlier in today's session, GCI's shares were down. The Dow Jones industrials, and the broader S&P 500 index were both down more than 1%.This morning's surge means CEO Craig Dubow and other top executives have made big paper profits on a slew of stock options they got in late February. The options vest over four years, starting in February 2010. Their strike price is $3.75, meaning the execs earn a penny paper profit every time shares rise above that amount.
Today alone, Dubow has made $450,000, based on that $4.65 level.
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Your approach here suggests the most significant thing about Gannett's "surge" is executive compensation.
ReplyDeleteAnother good example of your anger at Gannett management undercutting your ability to bring a broader perspective to Gannett-related business news. If Gannett is to survive, and let's hope it does for those roughly 30,000 employees who continue to work there, Gannett's value will increase and executive rewards will as wewll. So be it. Let's get focused on the bigger picture. At a time when the entire industry is on the brink of disaster I can now picture you standing up at the annual meeting and asking Dubow about that $40,000 in North Carolina. How off-topic can you get?
10:53
ReplyDeleteHow can Executive compensation NOT be an issue that is newsworthy?
It's an issue of debate in each and every struggling industry, AIG and the Auto Makers in particular.
Newspapers are seeing drastic declines in revenues, and the top exes reap huge rewards in the face of massive layoffs, pay reductions in the form of furlougs?
That is plain and simple theft from the pockets of former and current employees in order to gain "UNEARNED" bonuses.
I hope that Dubow makes a lot of money from his stock options. That means that the stock price will have continued to increase as his options vest over the next few years. That also means that the few shares that I have will also have increased and be worth more.
ReplyDeleteThat being said, I'm still sure that the whole of the company is worth less than the sum of it's individual properties. And I'm also sure that the more management that we get from on high, the less that the whole company is worth.
Unfortunately, long term thinking at this company extends only to lunch tomorrow and infinity ends at the end of the quarter.
Any attempt to equate the bonuses and rewards at Gannett to the excesses at AIG is emotional rather than rational. In the world of executive compensation, Gannett's executive rewards are not very large.
ReplyDeleteExecutives are rewarded for their efforts. Those rewards are most substantial when their efforts lead to company growth, but they may also be rewarded for their efforts to minimize the impact of bad economic conditions or new & unusual industry activities.
i actually thought this was a good thing. we all own shares. if shares go up, we benefit. if shares go up, the executives benefit. if shares don't go up, executives get nothing. executives' interests are aligned with shareholders' interests. isn't that what we want?
ReplyDelete"Any attempt to equate the bonuses and rewards at Gannett to the excesses at AIG is emotional rather than rational."
ReplyDeleteReally?
AIG's losses far exceeded Gannett's. Therefore, the executive compensation at AIG should have been much greater.
I mean, if you're gonna compare apples to apples in a world where executives get bonuses for non-performance, that is.
It'll be interesting to see what's gonna happen after all the managers and directors cash in their options today.
ReplyDeletethey can't. jim's note says that they vest over 4 years starting in 2010. so IF the stock is still up a year from now, i guess they can sell 1/4 of their options and profit. but zip until then.
ReplyDeleteunvested stock options really aren't worth a lot, even on paper.
I still maintain that this is a good thing. It encourages success in the company. If Dubow had received all of his bonus in stock options, which had no immediate cash value, I don't think most people would have been pissed. CEOs should succeed when their companies succeed, and most people are OK with that.
ReplyDeleteIt's the nearly $1 million in cash at a time when the company is cutting jobs left and right that's a farce.
This blog is the true farce.
ReplyDeleteCue the dumbasses who respond: "But you're looking at it!"
You make 'paper profits' on stocks, Jim, not stock *options.* They don't own the stocks for which they were granted options -- yet.
ReplyDelete9:52 am: You are absolutely correct. That is why I wrote: " The options vest over four years, starting in February 2010."
ReplyDeleteUnfortunately, I don't believe Dubow and the rest have made any paper money yet on these options.
ReplyDeleteI think you don't have all the facts. You need to know when the actual strike date is. Just because they received them in February doesn't mean that the strike price was as of the date they got them.
In fact, you might want to do a little more diggin to make sure that you have the right strike date ... you might find that the strike prices is actually a couple months before when the stock was much higher than it is now. I would just double check the facts on the strike price/date since I can't find any sourcing for your strike price quote.