Wall Street Journal: Insiders at GameStop, BlackBerry, LaCroix Maker Are Suddenly Sitting on Big Stock Gains
January 29, 2021
by Theo Francis
Retail day traders and Reddit stock pickers aren’t the only ones riding a surge in stock market gains. So are some chief executives and board members at long-struggling companies.
Ryan Cohen, the 35-year-old internet entrepreneur who bought a stake in GameStop Corp. GME -44.29% last year and joined its board earlier this month after agitating for strategic changes, is suddenly holding a stake in the videogame retailer worth $1.74 billion at Thursday’s close.
Pay consultants warn that tying compensation to all-or-nothing stock price triggers can result in awards based on short-lived market swings. A 10-day average can limit that risk, but longer averaging periods would be better, said Marc Hodak, a partner with executive-compensation consulting firm Farient Advisors LLC. “There’s just too much else that’s going to be driving the stock price that management has nothing to do with, even absent a situation like this,” Mr. Hodak said.
Three BlackBerry executives on Jan. 20 sold 131,454 shares at prices averaging between $12.63 and $13.01, for total proceeds of $1.68 million, according to data from InsiderScore. At the company’s Dec. 31 closing price, the sales would have yielded about half as much.