SiriusXM CEO Mel Karmazin has adopted a trading plan for SiriusXM securities for financial planning in connection with his philanthropic efforts. Karmazin will be exercising 60 million options to fund his charitable endeavors.
The trading plan, under Rule 10b5-1 of the Securities and Exchange Act of 1934, will begin in April. Karmazin is expected to exercise 60 million options to purchase SiriusXM shares. Shares underlying the options will be sold to cover the price to exercise the options and the remaining shares will be sold with the proceeds delivered to Karmazin. At Thursday’s (2/16) closing price of $2.15 the proceeds would be $103.2 million (before any taxes and brokerage fees).
Following this planned sale of shares, the CEO will still own over 68 million shares and options of SiriusXM, so he’s divesting less than half his total stake to benefit his favorite charities.
Rule 10b5-1 allows corporate executives to adopt prearranged trading plans when they are not in possession of material, non-public information. Under these plans, company securities may be bought and sold under specified conditions over an extended period of time. The 10b5-1 rule allows individuals to gradually alter or diversify their portfolios while avoiding concerns that the transactions are occurring as a result of insider information.
Karmazin’s announcement came a few days after SiriusXM President and Chief Content Officer Scott Greenstein did some stock maneuvers which appeared to be tax-related. He exercised 6,942,034 options at 43 cents each, for just under $3 million. He then sold them in two transactions for a total of a little under $15 million. Not a bad profit. And Greenstein still owns 13.9 million options and nearly 1.4 million shares.
RBR-TVBR observation: Once again the folks at the New York Times look like fools for their attacks on executives of other media companies. Do you think there will be any apology for their story last month? Don’t hold your breath.