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s_knight8
July 17th 06, 03:07 AM
http://bigpicture.typepad.com/

The WSJ continues its recent habit of burying killer stories in the under
read Saturday edition. This week's bombshell has to do with post 9/11
earnings grants:

"On Sept. 21, 2001, rescuers dug through the smoldering remains of the
World Trade Center. Across town, families buried two firefighters found a
week earlier. At Fort Drum, on the edge of New York's Adirondacks, soldiers
readied for deployment halfway across the world.

Boards of directors of scores of American companies were also busy that
day. They handed out millions of bargain-priced stock options to their top
executives.

The terrorist attack shut the U.S. stock market for days. When it
reopened Sept. 17, stocks skidded more than 14% over five days, in the worst
full week for the Dow Jones Industrial Average since Germany invaded France
in May 1940. But for recipients of options, the lower their company's stock
price when options are awarded the better, since the options grant a right
to buy shares at that price for years to come. The grants set recipients up
for millions of dollars in profit if the shares recovered.

A Wall Street Journal analysis shows how some companies rushed, amid the
post-9/11 stock-market decline, to give executives especially valuable
options. A review of Standard & Poor's ExecuComp data for 1,800 leading
companies indicates that from Sept. 17, 2001, through the end of the month,
511 top executives at 186 of these companies got stock-option grants. The
number who received grants was 2.6 times as many as in the same stretch of
September in 2000, and more than twice as many as in the like period in any
other year between 1999 and 2003.

Ninety-one companies that didn't regularly grant stock options in
September did so in the first two weeks of trading after the terror attack.
Their grants were concentrated around Sept. 21, when the market reached its
post-attack low. They were worth about $325 million when granted, based on a
standard method of valuing stock options."

What makes this so pathetic is that corporate executives could have stepped
up AND BOUGHT STOCKS IN THE OPEN MARKET if they believed they were so cheap.
It would have been reassuring to a nation to see the leaders of industry
voting with their own dollars. It might have made the subsequent economic
slow down and period of tense aftermath less painful.>

Instead, these weasels decided to loot the treasury at the first
opportunity. America was smouldering, the WTC lay in ruins, and this group
of classless pigs decided it was time to pocket some cash.

I'm going to take it a step further: These assclown executives are
unAmerican. They are not Patriots, they are not model citizens -- they are
merely a pathetic group of opportunistic whores who might as well hang
outside the Holland Tunnel looking for a quick buck (although that would
involve risk and work, something they have shown a distinct aversion to).

In 1929, when the stock market crashed, JP Morgan (and others) stepped in.
They bought stock with their own dollars, they saved Wall Street. Oh, and
they were rewarded for it -- both monetarily, and in the history books.

What the more recent group of execs did is probably legal. It certainly
isn't ethical, and it reveals them to be "lacking in moral turpitude." I
wonder if there's a morals clause in any of their employment contracts.

What a pathetic group of weasels. Brain cancer is too good for these
****heads. They -- and their lapdog Boards of Directors -- should all be
fired.



More on "Special" 9/11 Stock Option Grants
in Corporate Management

The request went up (in comments) for a who's who list of the post 9/11
stock option granters and grantees.

I put in a request to the WSJ journalists on the story; Meanwhile, the best
I can offer up are some excerpts from the WSJ sidebar (with graphics).

Kudos to the Journal for another terrific piece of investigative journalism.
Now if you guys would only stop burying killer stories on Saturday . . .

The short list of egregious offenders is after the jump.

Executive Pay: The 9/11 Factor

WSJ: "As stocks sank after the 9/11 attacks, scores of companies rushed to
issue options to top officials. For recipients of options, the lower their
company's stock price when options are awarded the better, since the options
grant a right to buy shares at that price for years to come. The grants set
recipients up for millions of dollars in profit if the shares recovered.
Here is a look at grants made in September 2001."
>

Home Depot
Number of top-level executives receiving grants: 5
Total estimated Black-Scholes value at time of grants: $19.2 million
Difference between Sept. 10 close and the options' exercise price: Down
10.7 % as of 9/17; Down 9.5% as of 9/18

Company comment: Said board approved "special equity award" on Sept. 17
and Sept. 18 to "retain key executives."

>
J. Jill Group
Number of top-level executives receiving grants: 5

Total estimated Black-Scholes value at time of grants: $2.5 million

Difference between Sept. 10 close and the options' exercise price: Down
34.2%

Company comment: Former director said he can't recall any effort to
time award to low stock price. Talbots, which acquired J. Jill, said it
can't comment because events happened before acquisition.

>
Merrill Lynch
Number of top-level executives receiving grants: 1
Total estimated Black-Scholes value at time of grants: $14.4 million

Difference between Sept. 10 close and the options' exercise price: Down
15%

Company comment: Said grant to Stanley O'Neal was directly tied to his
July promotion to president, not related to 9/11. Ex-head of committee said
firm would never try to time grants to occur after a national tragedy.

>
PeopleSoft
Number of top-level executives receiving grants: 2
Total estimated Black-Scholes value at time of grants: $2.0 million
Difference between Sept. 10 close and the options' exercise price: Down
38.4%

Company comment: Cyril Yansouni, a former director, said he had
"absolutely no recollection" of 2001 grants but said company didn't try to
time options grants to hit market lows.

>
Sandisk
Number of top-level executives receiving grants: 2
Total estimated Black-Scholes value at time of grants: $2.1 million
Difference between Sept. 10 close and the options' exercise price: Down
30.9%

Company Declined to comment

>
Teradyne
Number of top-level executives receiving grants: 7
Total estimated Black-Scholes value at time of grants: $14.3 million
Difference between Sept. 10 close and the options' exercise price: Down
24.2%
Company comment: Said grants were triggered by retrenchment plan that
began before 9/11 attack and were unrelated to the attack.

>
T. Rowe Price
Number of top-level executives receiving grants: 2
Total estimated Black-Scholes value at time of grants: $1.5 million
Difference between Sept. 10 close and the options' exercise price: Down
26.7%

Company comment: Chairman George Roche said grants "had nothing to do
with 9/11" and "you didn't know that there wasn't going to be a second round
of attacks."

>
UnitedHealth
Number of top-level executives receiving grants: 1
Total estimated Black-Scholes value at time of grants: $ 675,000
Difference between Sept. 10 close and the options' exercise price: Down
9.7%

Company comment: Declined to comment, citing ongoing review of options
program by a special committee of the board.

>
Weatherford
Number of top-level executives receiving grants: 5
Total estimated Black-Scholes value at time of grants: $13.8 million
Difference between Sept. 10 close and the options' exercise price: Down
29.7%

Company comment: Said meeting that gave options was prescheduled for
Sept. 12 and postponed. Said there was no attempt to time options to low
price.

>
Werner Enterprises
Number of top-level executives receiving grants: 5
Total estimated Black-Scholes value at time of grants: $8.5 million
Difference between Sept. 10 close and the options' exercise price: Down
26%

Company comment: Chief Financial Officer John J. Steele said the Sept.
28 grant did not mark a yearly low, and said "no one knew what direction the
market was going to move in the future."

sarp
July 17th 06, 06:06 AM
s_knight8 wrote:
> http://bigpicture.typepad.com/
>
> The WSJ continues its recent habit of burying killer stories in the under
> read Saturday edition. This week's bombshell has to do with post 9/11
> earnings grants:
>
.....

Instead of trying to politicize the group with this, you might better
spend your time clarifying SEC filings about interesting companies for
us.

This would better serve the cause for which we are all here,

which is to make some money in the market.

--- sarp