Essentially, this is just a variation on the theme of what American Airlines tried to do after obtaining concessions from its unions that ended up costing the CEO his job...this time it's executed with stock options and under the auspices of a bankruptcy judge.
I'm glad to see all our freemarketeers - with the exception of our one animal farm poster who seems to get it - chime in with such utter disregard for shareholder's wellbeing.
United's common stock is worthless. Unsecured creditors are supposed to receive minimal payouts - new stock representing only 4 percent to 7 percent of what they were owed. Current holders of UAL common and preferred shares would get no distribution whatsoever.
How the author values this 15% ownership at $285 million is never disclosed. He doesn't even bother to discuss what management has to do to earn the stock and profit from it. He wants us to believe that the company and the bankruptcy judge awarded $285 million to management just to stay in place. No way this is true. This entire article is bogus as is any argument that any deal, designed to attract and maintain the best management talent, is somehow bad for (the new) shareholders.