Gannett Digital President Jack Williams (left) has just cashed in 24,000 options on GCI stock -- the maximum possible -- netting him a $313,440 profit, a new regulatory filing this afternoon shows.Williams bought the shares only today from Gannett at the so-called strike price -- $3.75 a share -- and then sold them for $16.81 a share, according to the U.S. Securities and Exchange Commission document.
He and 10 other top executives were awarded the options a year ago as part of their 2008 pay. Williams got 96,000 at the time; they became his property, known as "vesting,'' in four equal annual installments starting Feb. 25.
Williams becomes only the latest in a growing number of senior executives cashing in their options, as evidence mounts that the top brass thinks shares won't rise much higher in the near term. His trade is the single-biggest among the top brass so far. No. 2 is Newsquest CEO Paul Davidson, who sold 16,250 shares on March 2 at $15.89 each, for a nearly $200,000 profit.
The others who've sold: Broadcasting division President Dave Lougee on March 22; human resources chief Roxanne Horning on March 2, and retiring labor relations director Wendell Van Lare on Feb. 26.
GCI stock closed today at $16.72, up 1%.
Earlier: Why next stock move by Dubow & Co. is crucial
Boy are these guys gonna be peeved when they realize in about 3 weeks that Gracia low-balled the 1Q results at the analyst meeting, and they could have had another $1+/share if she'd been more forthcoming there rather than preferring an "upside surprise" in mid-April.
ReplyDeleteThe three main options holdouts now are Dubow, Martore and Dickey.
ReplyDeleteUnusual Trading Activity for Gannett Co Inc
ReplyDeletehttp://www.marketintellisearch.com/articles/1007221.html
Two questions for anyone who knows the rules:
ReplyDelete1. If an executive exercises their options, but doesn't sell the shares, is that transaction reported to the SEC? Or is it only reported upon sale?
2. Is there a set time period on either side of an earnings release when insiders can't trade company shares?
8:22 pm: Kind of Greek to me. But as I understand that note, Wall Street today thought Gannett shares are headed higher.
ReplyDeleteThere are quite a few price targets for GCI in the $20+ range on Wall Street. Doesn't mean GCI will hit them, and usually such targets are for "within a year".
ReplyDeleteI think GCI will bias higher between now and April 15th, and depending on how much higher it goes between now and then will determine where it goes on April 15th/16th.
But "bias" is the word there. This stock is still highly influenced by the overall market. Any kind of shock to the general market could send it lower. Anyone who bought GCI in November/December is up 60%, and thus temptation to cash in will always be there at the first adverse event.
But if the general market stays supportive, something around $18.50 on April 13/14th would not surprise me at all.
Jim it looks like Saridakis sold some of his shares in his 401k plan and not his options according to the SEC filing. So it looks like he is still an option holdout along with the three you mention in your comments.
ReplyDeleteMan, and I thought you were a money reporter at one time!
ReplyDeleteThe only way to excercise shares is to sell them. That's how it works. You are given the rights and hope the prices rises between the time they were issued and the time you are vested. The whole point is to sell them when you are vested because they are only worth to you the difference between issue and sale.
Second, you are an idiot if you don't sell options unless you have a REALLY good suspicion the price will rise furhter before your option period expires. You see, you only have a certain size window to excercise the options and then it goes away.
5:18 am is correct; I forgot about him.
ReplyDelete6:13 am: Read page 21 of Gannett's shareholders proxy report.
ReplyDeleteThe report says you can exercise both incentive and non-qualified stock options, and defer their sale. Income taxes are treated differently, depending on the type of option. Here's the relevant language:
Incentive options: "A participant will not recognize taxable income upon exercise of an incentive stock option (except that the alternative minimum tax may apply), and any gain realized upon a disposition of common stock received pursuant to the exercise of an incentive stock option will be taxed as long-term capital gain if the participant holds the shares of common stock for at least two years after the date of grant and for one year after the date of exercise (the 'holding period requirement')."
Non-qualified options: "Upon exercising a non-qualified option, a participant will recognize ordinary income in an amount equal to the difference between the exercise price and the fair market value of the common stock on the date of exercise. Upon a subsequent sale or exchange of shares acquired pursuant to the exercise of a non-qualified option, the participant will have taxable capital gain or loss, measured by the difference between the amount realized on the disposition and the tax basis of the shares of common stock (generally, the amount paid for the shares plus the amount treated as ordinary income at the time the option was exercised)."
What's more, the window on these options is wide: They don't expire until Feb. 24, 2017, according to last year's Forms 4 with the SEC.
First the company has never to my knowledge granted incentive stock options. Those only have favor when tax situation is right, and they haven't been in favor for 20 or more years. Probably just in plan from days gone by.
ReplyDeleteNonqualified options are what most companies use. You can exercise and get cash, cash and stock, or stock only from them. Although I don't know why anyone might exercise and keep the shares, that defeats the purpose, unless there are sale restrictions.
You exercise and keep the shares because:
ReplyDeleteA. You are confident they will go higher, and
B. By holding them for one year or longer, you pay long-term capital gains tax, which is lower than the short-term capital gains tax rate.
9:32 am: I can't publish your comment without knowing your source for that information. Also, I don't think Williams is in charge of Military Times.
ReplyDelete