Document: Labor chief turns $100K profit on stock; Van Lare among execs awarded options a year ago

The Gannett executive responsible for tamping down union activity has turned a nearly $100,000 profit on stock options awarded to him only a year ago, public documents show. Wendell Van Lare, who is retiring next month, cashed in the 8,500 options on Friday, according to a regulatory filing yesterday with the U.S. Securities and Exchange Commission.

Stock sales by so-called insiders such as Van Lare (left) are often viewed as a sign that executives think share prices have peaked, and won't rise further anytime soon. There are other reasons to sell, however, including urgent needs for cash that can't be raised by any other means.

The 8,500 options were the maximum Van Lare could "exercise" under terms set by the company last year. He sold them near the earliest date possible, SEC documents show.

Van Lare was one of at least 11 executives awarded the options by the board of directors as part of their 2008 annual pay. They entitled the executives to buy Gannett shares from the company for $3.75 each, no matter how high the market price rose. Van Lare got a total of 34,000 options on Feb. 25, 2009. They become his property (called "vesting") in four equal annual installments starting Feb. 25 of this year -- last Thursday. Among last year's executives, Chairman and CEO Craig Dubow got the most: 500,000, this document shows.

At the time of the awards, the options became worthless almost immediately, because Gannett shares soon traded for less than $3.75; since then, however, they've soared in value. Today, GCI traded recently for $15.95 a share.

Linking pay to performance
Van Lare sold exactly one-quarter of his allotment, yesterday's SEC filing shows, "in multiple transactions at prices ranging from $15.3401 to $15.345." At the lowest end, he would have grossed a minimum $130,390. The shares would have cost him just $31,875, based on the $3.75 exercise price.

Options have become a common, although sometimes controversial, way to pay executives across Corporate America. They are designed to link pay to performance over time, because the executives benefit financially as their efforts theoretically boost a company's stock. Some corporate governance activists have criticized the practice, however, because it tends to emphasize volatile, short-term gains that don't always benefit other shareholders over the long run.

Last week, the board of directors granted another round of hundreds of thousands of options to Van Lare and 11 other executives as part of their 2009 pay. Those options have already increased in value as well.

Behan awarded 24K options
Yesterday, Gannett announced that Van Lare is retiring as senior vice president for labor relations on April 30, after 33 years in the labor relations department. He is being replaced by his lieutenant, William Behan. During Van Lare's tenure, the percentage of Gannett employees represented by organized labor fell to 13% last year from 20% in 1994, according to the oldest SEC records available online.

Also yesterday, the board granted Behan 24,000 stock options, plus another award -- 5,000 units of restricted stock (RSUs) -- according to an SEC document filed just moments ago. The options vest in four equal annual installments starting Dec. 11, 2010. The exercise price: $15.93 a share. The RSUs entitle him to receive 5,000 shares from the company on Dec. 11, 2013.

Should more employees get options as part of their annual pay? Please post your replies in the comments section, below. To e-mail confidentially, write jimhopkins[at]gmail[dot-com]; see Tipsters Anonymous Policy in the rail, upper right.