Monday (3/21) was the deadline for managers at Clear Channel Communications to swap their way-out-of-the-money options for new stock options with a lower strike price. CC Media Holdings, the parent of Clear Channel, reports that most took advantage of the offer.
Under the exchange offer employees holding stock options at $36 from the company’s 2008 Executive Incentive Plan were able to exchange them for half as many new options with a strike price of $10. There were some other conditions, but the main point was that the strike price was much closer to the recent trading price, so the options actually provided some incentive to managers to work at helping to get the stock price up.
We already knew that Clear Channel Radio CEO John Hogan – the highest-ranking executive eligible for the swap, since board members were excluded – had taken the company up on its offer. The final tally shows that nearly all other eligible managers did the same.
According to an SEC filing by CC Media Holdings, 91.6% of the options eligible for the swap were exchanged. So 2,547,432 of the old options at $36 were exchanged for 1,273,741 new options at $10.
By the way, the company stock closed that day (3/21) at $8.00.
RBR-TVBR observation: No doubt there will be lots of celebration when CC Media’s stock hits $10. It last closed at that level June 14, 2010.