Post-9/11 Option Grants Under Scrutiny

The WSJ continues its recent habit of burying killer stories in the under read Saturday edition. This week’s bombshell has to do with post 9/11 earnings grants:

"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."

What makes this so pathetic is that corporate executives could have stepped up AND BOUGHT STOCKS IN THE OPEN MARKET if they believed they were so cheap. It would have been reassuring to a nation to see the leaders of industry voting with their own dollars. It might have made the subsequent economic slow down and period of tense aftermath less painful.>

Instead, these weasels decided to loot the treasury at the first
opportunity. America was smouldering, the WTC lay in ruins, and this
group of classless pigs decided it was time to pocket some cash.

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The Cream of American Corporate "Patriots"

Post_911_20060714212444

Graphic courtesy of WSJ

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I’m going to take it a step further: These assclown executives are unAmerican. They are not Patriots, they are not model citizens — they are merely a pathetic group of opportunistic whores who might as well hang outside the Holland Tunnel looking for a quick buck (although that would involve risk and work, something they have shown a distinct aversion to).

In 1929, when the stock market crashed, JP Morgan (and others) stepped in. They bought stock with their own dollars, they saved Wall Street. Oh, and they were rewarded for it — both monetarily, and in the history books.

What the more recent group of execs did is probably legal. It certainly isn’t ethical, and it reveals them to be "lacking in moral turpitude rectitude."  I wonder if there’s a morals clause in any of their employment contracts.   

What a pathetic group of weasels. Brain cancer is too good for these shitheads. They — and their lapdog Boards of Directors — should all be fired.

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UPDATE: June 17, 2006 5:34am

A few emailers have asked why I feel so strongly about this; Perhaps this older 9/11 discussion — and the early forerunner of this blog — helps to explain why visceral reaction. 

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Source:
Executive Pay: The 9/11 Factor
As stocks sank after the attacks, scores of companies rushed to issue options to top officials. Some reaped millions.
CHARLES FORELLE, JAMES BANDLER and MARK MAREMONT
WSJ, July 15, 2006; Page A1
http://online.wsj.com/article/SB115292514221107632.html

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