Starcom Mediavest Group CEO Laura Desmond has been awarded $293,619 in stock options in the Tremor Video IPO because she sits on the board of that company, according to an S-1 filing with the SEC.
SMG is also a client of Tremor's and accounts for 20% of the video ad network's revenue, according to Marketing Week's Stuart Smith. That's about $20 million in 2012. Smith suggests that those options could net Desmond $3 million if the offering price is placed at ~$10/share.
In fact, Tremor stretched to make Desmond's options even more valuable than they initially were. The S-1 indicates that they lowered the price of the options (thus raising the potential gains on a sale) six months after they were first awarded:
On January 19, 2012, our board of directors granted Laura Desmond an option for 175,000 shares of our common stock at an exercise price of $4.04 per share, which option exercise price was modified to be $3.34 per share in July 2012.
Digiday's Jack Marshall points out that this appears to be a conflict of interest.
Desmond is recused from all negotiations with Tremor, and as CEO she's unlikely to be making nuts and bolts buying decisions anyway. But it doesn't look good: Desmond is responsible for setting overall strategic goals for the company, including deciding which media are more important than others.
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