Didn't think the piddling amount of options involved for JA was worth mentioning. I mean that amount of options is nothing especially since JA got 228,260 options for just 2004.
Of course it would be interesting to have someone show the justification for increasing the amount of options from the amounts awarded in the 90's to what he has received the last three years which is 228260, 186545, and 253526.
Oh, and another thing, bet he gets a bunch more for 2006 regardless of where the share price ends the year.
Jim, What is your real agenda? Do you really care about BBT as an investment, or is there some personal vendetta?
Your constant harping on option awards, coupled with your twisting of trust, does nothing to help investors who sincerely want to gain insight into this company. The number of options awarded to an executive is calculated by a predetermined formula that targets a future value for the recipient IF the share value increases.
An option award costs the shareholders nothing, nor does it provide any immediate value to the recipient. It simply entitles the recipient to buy shares in the future at today's market price. It acts as an incentive to the optionee to manage the company in a way that will result in enhanced share value. It isn't a gift of shares -- the recipient buys them at the option price. The only way an executive can benefit from an option is for the shares to increase in value during the option term, and that benefits all shareholders. As an investor, I'm happy to see that kind of incentive at work.
A cardinal rule of investing is that one must have confidence in the firm's mangement. You obviously don't have confidence in Allison or BB&T's other managers, so why keep hanging around and bashing them? Your postings on this board won't influence Allison's actions, nor bring about any change in management. Constructive criticism is certainly appropriate here, but your constant barbs don't fit that category.
You have got to be kidding when you state that options cost the shareholders nothing. Guess someone forgot to tell the accountants as my understanding is that the new rules require stock options to be expensed going forward. Options are definitely an expense to the shareholders in various ways the least of which is just diluting the numbers of shares outstanding.They also dilute the book value of the shares.
Let me see if I understand what you are saying which is JA and company receives salary, bonuses usually ,long term incentive payouts, 401k match, non qualified defined contribution plan, retirement plan, plus other assorted perks and an additional executive only retirement plan, but the company has to give them stock options so that they will manage the company in a way that will result in enhanced shareholder value?
My statement still stands. It appears that the executives get options regardless of the share price which is the only thing the shareholders receive other than the dividend. Example of the above is the year 2003. JA received no bonus, but was awarded 186,545 options for the year. These options are good for 10 years and are not indexed for inflation or any other pricing factors. The problem with options is that they just seem to mushroom on their own. According to the last proxy just JA now has 1,436,831 options. It wasn't many years ago JA's options were under 50,000 a year abd that was when the share prices were increasing drastically. My opinion is that the above just does not make sense especially when they are not indexed.
Glad that Stillie baby stated that you were a BBT employee. Some good advice for you would be that you do your owm thinking and just quit taking the company's line.
"An option award costs the shareholders nothing..." Poppycock - options have value (time value). This is why options are going to be expensed as compensation on Income Statements going forward (and they are NOT valued at $0.00, so this will reduce EPS, effecting shareholders). Stocks have a natural upward bias. If the banking index goes up 12%/yr over the next 10 years, and BBT increases by 7%/yr, you believe management should be rewarded? I think NOT.