IndyMac CEO surrenders (underwater) options

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For battered IndyMac Bancorp shareholders, it will have to be the thought that counts for the moment.

Michael Perry, chief executive of the Pasadena-based mortgage lender, has decided to give back to the company 1 million of his vested stock options, according to a filing with the Securities and Exchange Commission. And he isn’t getting new options to replace them.

A nice gesture, perhaps. But Perry, 45, wasn’t likely to make money on the options soon, anyway: They had an exercise price of $24.41 a share -- more than six times IndyMac’s closing stock price of $3.95 today.

IndyMac lost $712 million in the second half of last year as loan delinquencies rocketed. The company’s stock plunged 87% last year and the shares are down 34% this year, suggesting that Wall Street isn’t feeling much better about the lender’s future.

Perry opted to cancel 1 million of his vested options, according to the filing, because he wanted to allow the company’s directors to use those options to reward other employees. ‘While I am confident that in the long run the options would have had significant value to me personally . . . I saw that there was a much greater value to IndyMac and its shareholders in being able to spread these options more broadly among many people at IndyMac,’ Perry said in the filing.

You have to wonder if most mortgage-bank employees these days would rather just have cash.

Perry’s cash salary is $1 million a year. And he still has 1.5-million vested options and 210,278 that aren’t yet vested.