CEO has barely any vested interest in her own success with a paltry amount of current shares.
I get it - tax planning, blah blah blah. But do the math. Current share price is .44 and strike price is .29 which gives a taxable amount of .15 up front. If you are so knowledgeable about taxation of options then you know that this difference will be taxed at the capital gains rate of 15% and not the effective rate of the individual.
So $2M shares x .15 taxable "gain" x .15 tax rate = $45k in upfront taxes. Not the absurd $500k + that has been quoted here. The CEO can cry me a river about having to pay $45k in taxes while the shareholders pay her a $170k / year salary.
She has no vested interest in her own success and seems to not believe in her own plan. Not to mention she doesn't even have to exercise all her options - just some - please, just a few - show me you think you will succeed.
Come on CEO - I want to buy in here but the position I am considering is way bigger than the share count you currently have. I'm not going to be more vested in your success than you are.
When options are exercised, it is common practice to then sell a portion of stock to cover the exercise expense. For a given strike price, the higher the stock price, the lower the portion that needs to be sold to cover the exercise expense. Imo JC is holding out for a much higher stock price which will take time (measured in years not days). Unfilled gap at $4+
I think you are right but the challenge here is that there is not a lot in the way of positive pr's or financial statement evidence that the turn around is working. So for those that are not insiders we really do not know what the forecast looks like.
Personally, I am a huge proponent of the long-term approach. It seems that the last few JSDA CEOs were looking for the big bang answer - when the reality was that there was none that existed. It is really tough to make that call that we need to reduce our workforce in order to be profitable so Kudos to the CEO for that call.
The share value is getting decimated and shareholders are losing faith in this CEO - remember she reports to shareholders. It is her job to keep shareholders confident that she has the company on the right path.
The quickest way to do that is to exercise some options. Just a simple - hey, I'm in this with you and I believe in my plan. She doesn't have to blow her whole load or anything - just have a vested interest and not a paycheck no matter what.