GM’s CFO sells shares a bit late
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Being a dyed-in-the-wool company man can make you poorer in a hurry.
That’s the lesson on display with General Motors Corp.‘s chief financial officer, Ray G. Young. While other top GM executives dumped their shares for nearly $325,000 a few weeks ago in anticipation of the rumored bankruptcy filing that ended up becoming a lot more than a rumor, Young held steady.
It was a surprising show of faith in the company from a man who, perhaps more than any other on the planet, was aware of the GM’s grim financial picture and the growing likelihood that it would file for Chapter 11 protection.
As it turns out, GM was in a hopeless situation, with twice as many liabilities as assets and, sure enough, it filed for bankruptcy on Monday.
On Wednesday, a day after GM dropped off the NYSE and became a pink sheets issue, Young sold his stock, according to a filing to the Securities and Exchange Commission.
The executive, who has been making the rounds on the tube to explain his company’s situation, unloaded 11,579 shares at 55 cents apiece. That’s $6,368.45 worth of the bankrupt carmaker.
Young’s colleagues, including former vice chairman Bob Lutz, got out when GM was still well over $1 a share. And if Young had held his shares for a day longer, he could have gotten more: GMGMQ (the new ticker for the stock) traded at 75 cents today.
According to the SEC filing, Young has exercised options for 212,487 GM shares since 2001, with strike prices as high as $75.50.
In addition, as a top executive, Young was forced to accept a 20% pay cut to his $900,000 annual salary this year under terms of the original round of bailout loans GM received.
It’s a bitter pill for Young, who has been at the company since 1986 and served it in Europe, Brazil and Asia.
So why hold the shares so long? A GM man to the end, Young said he stuck with the automaker for reasons beyond compensation. ‘There’s a tremendous loyalty to this company,’ he said in an interview earlier this week.
‘We basically have written off our life during the past year. We’re not crazy. We’re not talking about service to the country here. We really do believe in GM.’
--Ken Bensinger