Sirius XM, for its troubles and debt load, is supposedly working itself out of a ditch.
The stock, long a favorite of daytraders, has gone from an all-time low of $.05 to $.55 in just 8 months. That’s an 1100% return for the most meticulous timers. But just because the market likes to fling the company’s stock around doesn’t mean the company should do so.
A story in today’s Wall Street Journal notes that five executives sold nearly $3.2 million in stock over the past few weeks.
“The executives collectively received almost 10 million restricted shares of Sirius XM on May 19, with the shares to vest gradually over about 40 weeks.”
The author spoke to the company spokesman who stated that the shares were granted as short-term incentive pay.
Clearly!
I can understand a company in dire financial straits offering key executives options or restricted shares to stick around/meet goals, but 40 week vesting?
Either Sirius XM, at the time of the grant, didn’t think its trading stock would actually make it that long or the financial incentives there are quite perverse.
As a subscriber (and therefore a stakeholder), I’m thrilled to see Sirius XM stay healthy. As a proponent of shareholder value, I can’t see how you can match short-term incentives with stock grants.
