http://www.canada.com/ottawa/story.asp?id={7DC8D0EF-9097-4FDD-98B3-567A4 FD78577} ====== JDS insiders made $1B selling stock Monday, August 26, 2002 ADVERTISEMENT TORONTO -- Fourteen JDS Uniphase Corp. insiders, including chief executive Jozef Straus, racked up more than $1 billion US selling company stock during the past 3 years, according to a tally by the New York Times. "That is astonishing and unconscionable,'' Dennis Gartman, a veteran trader and publisher of an influential daily market newsletter in Suffolk, Va., said in an interview. "Fibre-optic parts maker JDS, based in Ottawa and San Jose, Calif., was among 16 companies listed in which executives, and sometimes their relatives, made millions of dollars, often by selling the stock just before profit predictions were proved wrong, the Times reported. Among JDS executives named in the report, former CEO Kevin Kalkhoven had net proceeds _ stock sales minus the cost of exercising stock options _ of $245.9 million, while Straus pulled in about $150 million in share sales over the past 42 months. They ranked among the top 10 beneficiaries in the listing. JDS officials were not immediately available for comment. The New York Times used data compiled by Thomson Financial and circulars from the companies. The telecommunications industry, which includes Canadian giants Nortel Networks Corp. of Brampton, Ont., and JDS, has been battered for almost two years as customer spending and access to capital have tumbled. Shares of JDS (TSX:JDU), for example, peaked at just above $200 Cdn in early 2000. They closed Friday at $5.12 on the Toronto Stock Exchange. Nortel executives weren't on the list. Some industry observers, including Gartman, say insiders cashing out is one indication that they don't have much faith in the company. "If you believe in your company, you ought to be holding your shares,'' he said. Among executives, directors and other insiders who benefited from selling company stock was Philip Anschutz, director and chairman of the executive committee of financially troubled Qwest Communications International Inc.'s board. He ranked at the top of the list, with net proceeds of $1.5 billion US. He was followed by former AT&T Corp. board member John Malone, who netted $340 million. John Chambers, chief executive at San Jose-based Cisco Systems Inc., was among the top 10 executives, with $223 million. In total, 13 executives, directors and insiders of Cisco benefited before the technology bubble burst, selling stock to collectively make more than $700 million. Executives at Comverse Technology Inc., Nextel Communications Inc. and McLeodUSA Inc., the second-largest independent directory publisher in the United States, also ranked among the top 10 beneficiaries. "Should we be surprised? No,'' Mr. Gartman said. "Is it wrong that they sold that much? Absolutely.'' At the same time, Gartman doesn't feel a great deal of pity for shareholders, many of whom hoped that stock prices would recover. "Nobody made them stay,'' he said. "I'm a believer that you should put stops in on trades.'' Nonetheless, when executives sell that many shares and reduce their positions drastically, "it does lead me to believe that something was remiss and that one would have wished they would have done otherwise,'' Gartman said. Bill Dimma, author of a new corporate governance book Excellence in the Boardroom, said he has found the excessive number of options granted over the past couple of years and the exercising and sale ``very discouraging and very upsetting.'' Dimma is a believer that option plans should be changed. He says a company should outperform its peer group or meet internal aggressive targets before the options are handed over to the executives. He said executives who made vast sums of money over the past few years did so as a result of excessive option grants. "They were free to sell at the peak of the market, and insiders certainly have a better idea of where that peak was than anybody else,'' he said. Like Gartman, he said the millions of dollars that executives, directors and other insiders have made in the selling of stocks shows that they "put personal greed ahead, whether they have faith in the company or not.'' C Copyright 2002 Canadian Press THE END ==^================================================================ This email was sent to: [email protected] EASY UNSUBSCRIBE click here: http://topica.com/u/?bUrHhl.bVKZIr Or send an email to: [EMAIL PROTECTED] T O P I C A -- Register now to manage your mail! http://www.topica.com/partner/tag02/register ==^================================================================
