Well Done, Ken Chenault and Guys at Capital One: You Snagged Huge Options After Market's Crash
Banking executives have proven extremely good at delivering returns for themselves, and that was especially true during the financial crisis. As the government’s Troubled Asset Relief Program wouldn’t let banks pay bonuses unless it was in long-term restricted stock, banks paid executives a lot of that when stock prices were low. Now that they’ve bounced back, those grants have done remarkably well – for the grantees.
In the New York Times, Steven M. Davidoff had Equilar calculate the value of compensation packages at 18 banks awarded between July 1 2008 and June 30, 2009. A few stood out.
In January 2009, American Express (AXP) paid chief Kenneth Chenault 1.2 million options with a strike price of $16.71. Those options are worth $50 million now – and other executives got options worth another $41 million.
Davidoff says the options have risen 1,097% in value. And how about American Express stock?
Meanwhile Capital One (COF) awarded its executives options in 2009. Those options are now worth $114 million. Davidoff points out that Capital One’s options had a strike price of $18.28.
Equilar calculates the Capital One options are up 838%. But the stock?