Options hog and other stuff…

January 28, 2005

Online brokerage firm Ameritrade’s (AMTD) recent proxy had a number of interesting disclosures. The first to jump out was that over 80% of all options granted to employees last year went to one person: founder and chairman J. Joe Ricketts, who received 750,000 options @ $10.90 a pop under an amended employment agreement signed last August. The proxy notes that Ricketts, whose two sons are also senior executives at the company (though thankfully not on the compensation committee) will not receive any additional options until the company reinstates a stock option plan for senior executives. Meanwhile, despite the loss of options for those top executives, they still managed to receive hefty bonuses last year, despite the stock falling modestly during fiscal 2004. CEO Joseph Moglia and Ricketts each saw their bonuses increase nearly 50% while CFO John MacDonald saw a nearly 100% increase in his bonus. The PDF of the proxy that I downloaded had all of these numbers really squished together, making it hard to do a quick glance — let’s hope that was purely accidental. Finally, Moglia who plans to step down as CEO until the end of September, signed an amended employment agreement in mid-December. When he steps down, he’ll receive $15.6 million in deferred comp and options equal to 2 percent of all outstanding shares and be prohibited from competing with Ameritrade for a year, during which he’ll be paid his full salary and bonus. He will also serve as CEO Emeritus through 2010 and receive office space and secretarial help in Omaha or another location of his choosing. I’m betting on Naples, Fl. where lots of CEOs seem to retire.

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