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WSJ on the spike in stock options just aftr 9/11
From: David Farber <dave () farber net>
Date: Sat, 15 Jul 2006 12:49:25 -0400
Begin forwarded message: From: Tim Finin <finin () cs umbc edu> Date: July 15, 2006 12:06:20 PM EDT To: dave () farber net Subject: WSJ on the spike in stock options just aftr 9/11 This article in today's WSJ reveals how the top executives of *some* leading companies responded to 9/11 -- by rushing to enrich themselves by issuing stock options as markets fell. Since these were options, it's hard to see this as anything other than a selfish and opportunistic taking advantage of the nation's misfortune. -- Executive Pay: The 9/11 FactorAs stocks sank after the attacks, scores of companies rushed to issue options to top officials. Some reaped millions.
WSJ, July 15, 2006; Page A1 http://online.wsj.com/article/SB115292514221107632.html 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. ... ------------------------------------- You are subscribed as lists-ip () insecure org To manage your subscription, go to http://v2.listbox.com/member/?listname=ip Archives at: http://www.interesting-people.org/archives/interesting-people/
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