Posted on 01/17/2009 12:40:10 PM PST by television is just wrong
LOS ANGELES (AP) - The Walt Disney Co.'s chief executive, Robert Iger, received a compensation package worth $51.1 million in fiscal 2008, up 85 percent from a year earlier, but most of it came in stock options that are currently worthless, according to a regulatory filing made Friday. Iger received the option to buy 3 million shares at $29.51 each on Jan. 31 last year when he agreed to a new five-year contract through 2013, the Burbank, Calif.-based company said in a filing with the Securities and Exchange Commission. Those and other options, which were estimated to be worth $34.4 million when they were granted, are currently worth nothing because the shares closed Friday at $21.46. According to the filing, Iger also declined a $2.4 million bonus related to total shareholder return. Disney shares have dipped 34 percent since the fiscal year ended Sept. 27. "He thought it was the appropriate thing to do," said Disney spokesman Jonathan Friedland. Over the fiscal year, the share price slipped 2.3 percent, to $32.75 from $33.52. Disney's annual revenue grew 7 percent to $37.8 billion while net profit fell 5.5 percent to $4.43 billion. Iger received a salary of $2 million, non-equity incentive plan compensation of $13.9 million, and other compensation of $773,090, the filing said. The executive's other compensation included $107,897 for air travel, $645,368 for security and another $14,400 in reimbursements for such expenses as health club membership and annual physical exams.
(Excerpt) Read more at breitbart.com ...
So does he have 3 million shares or not?
He has the ability to BUY the shares at some future date for an agreed upon price. So no, he doesn’t have the shares.
He has the right, but not the obligation, to buy 3 million shared at $29.51.
Since the stock is currently trading for 21 and change, this right is of no value at the moment. But if the stock went up to 40, it would be very valuable indeed.
Yes, the shares are worthless because they are lower than what they were when his options were priced. Stock options get priced at a certain time, and at the time Iger got the options, the stock was in the high 20s range (that would be his cost basis). NOw, when you get options, you normally have to wait years till they all vest, a certain percentage vests every year.
Once the options vest, the only way you can actually sell is when the market price is higher than what the options priced at. So Iger’s options priced at $29 plus, with the stock price at $21 plus, there’s no money to be made.
Gotta love that gotcha headline, I was ready to have a fit until I read the rest of the article and realized that $51 million depends on the stock price going up more than what the options priced at. Moreover, the guy did not take a bonus, now if AP wanted to be nice, they would have had a headline that said “Disney CEO turns down bonus).
Ah, yes, the media, don’t you just love how deceptive they try to be?
Thanks for all the information.
Good work if you can get it. Is Disney begging for government handouts? No? The Mr. Iger gets paid whatever the shareholders think he’s worth.
What are you talking about? Most of the money were stock option that if exercised would be worth $24 million LESS than he paid for them.
The title is totally misleading.
He has the option of buying the shares at the grant price of $29.51 when they vest. Since the grant price is about $5 below the market price, the options are of no value since he could buy them on the open market for less.
I didn’t make up the title. it is as it was found. :) put up for discussion.
I realize that.
If he leads the company to a position where the stock rises to above $29, he “has earned” the profit. This is perfect free market compensation for a CEO. If your company is doing better, you get paid more.
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