Three months before the stock price of Bear Stearns plunged below $3, general counsel Michael Solender unloaded 2,087 stock options at $89 per share. Solender pocketed a nifty $186,000 on Dec. 21, 2007, according to a form filed with the Securities and Exchange Commission.
Solender still holds options for 17,500 shares, which do not appear to have been exercisable under terms of the company's deferred compensation plan. Those shares would have been worth more than $1.5 million in December; today, they are worth only $170,000 unless the stock continues rising.
Bear Stearns promoted Solender to general counsel from managing legal director in 2004. He earned his stock options as part of the company's deferred compensation plan for executives. Solender was a partner at the Washington, D.C.-based law firm of Arnold & Porter and general counsel to the Consumer Product Safety Commission before joining Bear Stearns in 2002.
Solender wasn't the only one to cash in shares last December: Five other Bear Stearns insiders also exercised their stock options, with director Paul Novelly selling the most. Novelly collected more than $4.34 million for his 50,000 shares, according to SEC documents.
Company spokesman Russell Sherman says the sales were not unusual. "Historically," he says, "executives at Bear sell stock at year end for tax purposes and portfolio diversification."