What? "You can't .. argue .. insiders are overpaid .. and then .. chastise them for not .. buy[ing] more shares". Of course we can. Is it too much to expect the most SENIOR management to exercise and HOLD at least SOME shares ESPECIALLY IF they believe the stock price will be higher in 12 months!?
The only reason insiders at IDCC are selling immediately, regardless of the tax consequences, is because they are already AWASH in stock options, not to mention another 5M more ISO share windfall potentially just around the corner at the June ASM.
Furthermore, the difference in tax rates between long and short term capital gains rates is very SIGNIFICANT (and even more so under AMT). Many, many managers at other companies exercise and HOLD their shares to reduce the tax bite. Then, after a year they sell some shares at long term capital gains rates to fund exercise of latter options, and so forth.
That is how I expect our SENIOR management to behave WHEN they BELIEVE the share price will go up in 12 months and they cherish their stock options. Clearly, at our company, we have ISO excesses and insiders that are simply awash in stock options, so they choose to exercise and sell, regardless of the tax bite. Why should they care about the tax bite, since shareholders will just give them more options.
If you want management to value their stock options much more than they do now and to drive the price per share rather than the number of ISO shares they can grant themselves, then ....
.... [you know what's coming] .....
.....
Vote "NO" on proxy measure #2.
Corp_Buyer
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