Broadcasting division President Dave Lougee (left) has exercised his right to sell 10,625 Gannett shares, which he bought from the company with stock options awarded to him a year ago, according to a just-filed regulatory document.Lougee paid Gannett so-called strike price -- $3.75 a share -- and sold the block for $16.18 a share on Monday, the U.S. Securities and Exchange Commission filing today shows. His profit: $132,069.
Lougee is now the fourth senior executive to take advantage of the options, which were awarded a year ago as part of their 2008 annual pay. Lougee could have traded as many as 21,250 of his allotment. He got 85,000 options last year. They become his property, or "vest," in four equal annual installments starting Feb. 25.
GCI closed today at $16.55, down 1%
Yesterday, I said the relatively few insider sales of these options suggested the top brass thinks Gannett shares are headed higher.
Shows how much faith these execs have in the future of Gannett. Or maybe they have a glimmer of what the Q1 results will be. If you look at the new furloughs at the Fort Worth Startlegram, you see that ad revenue is not improving.
ReplyDeleteLougee told us that there will be raises in broadcast this year but that they will not be "across the board" instead "targeted".
ReplyDeleteLougee is the most-senior of these executives to cash out so far. If Dubow, Martore or Dickey sold shares, then we'd have an interesting story.
ReplyDeleteThis is the first time in years that any of their stock options have had value. Until now, all the thousands of options they've received have been worthless.
That's one reason why they've persuaded the board's compensation committee to no longer require they take any of their bonuses in stock. Yet, at the same time, those all-cash bonuses send a powerful message to Wall Street and to the employees: The top brass doesn't think GCI's stock is a good investment right now.
Don't forget that once he's vested in them the difference between the strike price and the market price is a taxable event, whether he sells them or not. And even if the price goes down later if he doesn't sell them, they are taxed at the price he vested in them.
ReplyDeleteThere were a lot of stories about that kind of thing when the dot com bubble burst --guys paying huge tax bills on worthless stock.
So I'm not so convinced that selling bonus options stock means much of anything other than getting the taxes paid.
9:37 am: Doesn't the outcome depend on how you invest the cash proceeds? If you pick a winner, you more than recover the taxes paid, no?
ReplyDeleteI suppose, but the IRS is famously insistent on getting paid, and famously unsympathetic to excuses. A lot of people would just want to pay them off immediately rather than assuming an ability to do so later. A bird in the hand and all that.
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