AOL's Case gained $127 million in stock options
By John Rega
Bloomberg News
WASHINGTON — AOL Time Warner Inc. Chairman Stephen Case realized $127.3 million last year by exercising options to buy shares of the world's biggest media and Internet company, according to a regulatory filing.
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The Hawai'i-born Case, 43, acquired 2.7 million shares during the year using previously granted stock options, according to AOL's proxy filing with the Securities and Exchange Commission.
Steve Case acquired 2.7 million AOL shares.
When acquired, the stock was worth $127.3 million more than Case paid to exercise the options.
At the end of the year, Case owned options valued at $399.7 million, the filing said. AOL shares are down 27 percent this year, including a drop of 91 cents to $23.30 today.
Aside from stock options, Case's holdings of 11.5 million shares as of Jan. 31, as listed in the proxy, would now be worth $267.3 million.
Gerald Levin, who is retiring as chief executive officer at New York-based AOL as of the May 16 annual meeting, will also depart the company's board at that time, according to the proxy filing. He isn't being replaced, leaving the company with 15 directors. The company is nominating all of its current board members for re-election.
Levin didn't exercise stock options last year, the filing said. A year earlier, he had realized $152.6 million of gains from option exercises.
AOL disclosed in February that it awarded 4 million options each to Case and Levin during 2001, in lieu of cash bonuses for last year and this year. Yesterday's filing valued those options on the dates of grant at about $76.1 million for each executive.
The company's shares will have to rebound to more than double the current price for the executives to see any value from those options, though.
Half of the grants carry exercise prices of $48.96 a share, AOL's stock price when the options were awarded in January 2001. A quarter carry a 25 percent premium to that value, with a $61.20 strike price, and the rest are exercisable at $73.44, according to the filing.
AOL's board "decided to emphasize long-term, equity-based incentives in the form of stock options, more than annual cash bonuses, to link compensation to improvements in financial and operational performance reflected in stock-price performance," the SEC filing said.
