Managers at Clear Channel Communications are currently weighing whether to take the company up on its offer to re-price their stock options for parent company CC Media Holdings from a target of $36 per share to half as many with a target of $10, which is much closer to the recent trading price. But it turns out that there was a stock sale last year at that higher price.
According to the annual 10-K the company filed with the SEC, on August 23, 2010 the company bought 200,000 shares from CEO Mark Mays at $36 each “pursuant to a put option included in his amended employment agreement.” So, Mays was paid $6 million for stock which, at the closing price of $6.15 on August 23, 2010 was worth $1.23 million on the open market.
Mays still has lots of shares of the company’s stock. That was about a third of what he owned at the time of the sale, since an SEC filing showed he still had 467,347 shares after selling those 200,000 back to the company.
The CEO announced last year that he would step down at the end of 2010, but Mays recently extended that to the end of March.
As a director of the company, Mays is not eligible for the current option re-pricing offer. RBR-TVBR reported last week that Clear Channel Radio CEO John Hogan, who appears to be the highest ranking company manager who is eligible, had taken advantage of the offer and swapped his options.
RBR-TVBR observation: Perfectly legal. With his family no longer controlling the company, Mays wrote some insurance into his employment contract. As it turned out, that insurance paid off.