He didn’t sell all his assets. He exercised his annual options.
When I worked at a larger bank we got out options packages in March. We also got our bonuses in March—as that was the deadline for the bank to tak them on the previous year’s taxes.
Options would vest over 7 years. In our case, for example, the Executive level was granted options in year 0 that were at a price around $1.35. This was right after the banking crisis in the 1990s.
7 years later, the stock was in the low $30’s based on actions taken by that executive team. In March of year 7, these executives received their bonuses and turned around and cashed in those options; they were worth about $35 in profit. If they didn’t do that, they would lose millions of dollars.
The second point is that the top earners of the bank could only exercise their options during specific periods. And, they had to notify the regulators when they did it.
So, a bank President exercising options and getting paid their bonuses in March is “normal.”
Did the President know his bank was on shaky ground? Absolutely. He would have known that for months.
My point is not to defend this person—they acted like an idiot. My point is to explain how options and bonuses are paid in a banking operation.
Explains why a stock option I once held would be distributed in March. My only problem was that I was required excersize that option the preceding Oct. I didn’t...and lost a bundle. The stocks I held at that time (2000) were worth about $50,000. Today, what with sales, mergers etc, that has become a couple of hundred. I keep them for one reason only, to remind myself to
STAY THE HELL OUT OF THE MARKET.
I’ts not a game for everyone.