Guest WA777 Posted April 7, 2003 Share Posted April 7, 2003 It doesn't take much thought to see that this will significantly dilute shareholders' value....then what??? Link to comment Share on other sites More sharing options...
Guest TonkaJet Posted April 7, 2003 Share Posted April 7, 2003 HUH???? Link to comment Share on other sites More sharing options...
Elfric Posted April 7, 2003 Share Posted April 7, 2003 The "100k" bonus to which you speak is, I believe, supported by and encouraged by the top shareholders at WestJet. The options are allowed to be only a maximum of 10% of the outstanding shares, although WestJet has applied to have this upped to 12%, but last word was that we were still below the 10% mark. Link to comment Share on other sites More sharing options...
Tango Niner Posted April 7, 2003 Share Posted April 7, 2003 Part of this 10% problem is as a result of our success. We have so many pilots now - I'd venture to say more than anticipated by the Big Whigs - that those options are a big pool. It's not just 100K in options for the Capts but about 70K for each F/O. So it adds up. Growing pains. These are good problems to have! T9 Link to comment Share on other sites More sharing options...
Guest Philip Aubin Posted April 7, 2003 Share Posted April 7, 2003 Just to clarify this whole issue of options for WJ pilots, the WJ option grant is not worth anywhere near $100K for Captains or $70K for First Officers. The 100,000 is just a number that is used to determine the NUMBER of options to be granted. In the orginal WJ contract, Captains got 7000 options per year and FO's got 5000 options per year. In the most recent contract Captains get a NUMBER of options equal to 100,000/stock price. For First officers it is equal to 70,000/stock price. I am not sure whether the stock price used is the pre-split price or the post split price. At a share price of $25.50/share pre-split or $17/share post split, WJ Captains would recieve either 3921 or 5882 options. First Officers would recieve either 2745 or 4117 options. The net effect of new methodology is that pilots recieve fewer options as the stock price increases. Of course, the other side is that if the stock price falls, the number of options granted could increase dramatically. It is due to the POSSIBILITY that the stock could drop that WJ needs to increase the number of stock options available. Back to the value of the grant, options are valued using a complicated methodology. They are certainly not worth the value of the stock itself, otherwise you would just issue stock. Without doing the hard math I would guess that the market value of each option at issue would be between $2 to $4. Thus depending on the number of options granted and the market value of each option, I would estimate the compensation value of these grants could range: from $2 x 3921 option = $7842 to $4 x 5882 options = $23,528 for Captains; and $2 x 2745 options = $5,490 to $4 x 4117 options = $16,468 for FO's I hope this provides some perspective. Philip Aubin AC pilot PS. To the WJ guys, if I got it wrong please forgive and feel free to correct any errors in the above. (By the way, isn't the number actually 95,000 for Captains??) Link to comment Share on other sites More sharing options...
Guest neo Posted April 8, 2003 Share Posted April 8, 2003 "After WJ stock marched from $6 to $16 during the seven months from Dec.99 to June.00, it really hasn't done much. That's three years of stagnation." The three year period from summer '99 to summer 2002 saw WJ shares increase in value by 300%. I wouldn't mind cashing in on a little stagnation like that. Depends on how you look at it, I guess. "I guess the difference is that our pay isn't directly related to stock price." Our pay is indirectly related, but inextricably related nevertheless, to stock price. Suggesting that cash wages are somehow independent of your employers stock performance simply doesnt' make sense over the long term. Indeed, believing that your wages are independent of stock performance may be part of the reason why we're in crisis. neo Link to comment Share on other sites More sharing options...
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