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Who Got What in a Slowing Economy
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Rothblatt last year doubled the price of United Therapeutics stock, a Silver Spring company she founded to pursue a cure for pulmonary arterial hypertension, a disease that afflicts her daughter. In accordance with her employment agreement, the company awarded her options equal to one-18th of 1 percent of the growth of the stock during 2007. Her 582,607 options were granted last December and they vested immediately, giving her an option to purchase the company's common stock.
Rothblatt's 2007 stock options were valued on United Therapeutics' books at the end of the year at $23.7 million, but if she sold them today they would be worth $3.5 million.
Rothblatt's package differs from some stock option packages, which tend to vest in stages over a period of years. Rothblatt doesn't get option awards if the stock doesn't grow that year.
"The take-home message for the way we compensate our chief executive officer is that our compensation committee tried to align that compensation as nearly as possible with the interest of our shareholders," said Andy Fisher, United Therapeutics senior vice president.
A perennial figure on The Washington Post's survey is Richard Fairbank, founder, chairman and chief executive of Capital One Financial, the McLean credit card company that has been hard hit by the subprime mortgage crisis. Fairbank typically takes his entire compensation in the form of stock options, then waits years for them to vest. Even after the options vest, Fairbank generally holds onto the shares as a sign of his confidence in the company.
Last year appears to be no exception. Capital One paid Fairbank $17 million in options although the company's stock was one of the worst performers in the region, declining 40 percent in 2007.
Despite the stock decline, the company's proxy statement said several factors helped determine Fairbank's pay, including his execution of corporate strategy, reorganizing business lines and recruiting talent.
The options will have value only if Fairbank grows the stock.
