That's not what I'm saying, I'm saying that part of the entire package they offered him included the options. Having options is as big or bigger in terms of awarding people with incentives to grow the value of the stocks. He'll have a sizable holding in the company once the options are exercized, but they'd be worthless if there is no success.
I have no problem with key people earning options rather than buying stock, in many cases key people are prevented from purchasing stock much of the time as they have inside information on what's happening. Certainly there are times when they can purchase, but it's never announced that company personnel may now purchase stock, you know they can if they do it.
I know in IMGN when options vest certain executives either cash them all in immediately, or at least in sufficient numbers to pay for the entire purchase, they're purchasing them at a substantially discounted price. Some people are concerned that they're selling, I'm not as I also know they're holding a lot of shares. A former executive sold much of his holdings, not because he didn't believe in the company, but because he was advised not to have such a concentrated position.
I believe people place too much emphasis on executives buying, or selling stock. An old broker friend of mine pointed out that like any of us, they do things like purchasing homes, cars, putting kids through school, etc and may need or choose to cash in stock to do so, likewise when they purchase it may be for the purpose of gifting the stock to a friend or relative. Most executives receive plenty of stock options in their incentive package, they'll be very wealthy if they make the rest of us wealthy as well.
Gary
