CEOs Cash In On Tragedy

In this morning's Wall Street Journal, there's a lovely front-page story about some patriots in our corporate board rooms... Post-9/11 Option Grants Under Scrutiny "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. They were worth about $325 million when granted, based on a standard method of valuing stock options." Barry Ritholtz of www.bigpicture.typepad.com has some pungent commentary on the above. Me, I post this because, over the years I've had to endure indignant posturing from various studio execs who rail about "greedy employees" who leave a job for a better paying one, or ask for more money, or moonlight, all to earn a few thousand dollars more a year. And I guess I grow tired of the bogus moral indignation from the kind of millionaire company bigshots who have no problem with lining their pockets during -- and because of -- a national tragedy. So next time you have some twinge of conscience over leaving one multi-national conglomerate to go to work for another multi-national conglomerate for better pay, or feel guilty about taking extra work from another company on weekends, think of the article above. And get over it.