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.
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.