Naspers chairman Koos Bekker cashed in nearly 11,7m Naspers options as the options were issued specifically as remuneration during his tenure as CEO of the company.
He could not afford to pay for the options from his own means at the end of the period, due to the extent the shares had appreciated in value.
In an e-mailed response to Moneyweb questions, Bekker said the options were issued for the specific period between 1 April 2008 and 31 March 2014 — the period he was appointed CEO of the company.
“The options were issued (in lieu of a salary and bonus which was fairly unique at the time) to reward the net growth in value in the shares, adjusted for inflation.
“The profit was calculated as follows: the market value of Naspers shares at the end of the five-year period, minus the market value of the shares at the beginning of the period, adjusted for inflation over the period.
“This resulted in a profit as the value growth exceeded the rate of inflation. On this profit I paid tax at the marginal rate.”
Bekker said there is a simple reason why he exercised the options. “These shares were issued specifically for the position of CEO and this role came to an end (on March 31 2014). In no way, given the amounts payable for the original purchase price plus inflation and tax payable, could I afford to take the money from my pocket to exercise the options myself. That is implicit.”
Naspers’s share price on 1 April 2008 was R162,50 and closed more than 610% higher at R1 161 on March 31 last year. This appreciation flowed from Bekker’s leadership and the company transformed from a South African and print-focused media company with a market cap of R5,6bn, to an international media goliath valued at more than R700bn.
It is not clear at which price Bekker exercised the options, as they were only due to expire in 2018. Bekker exercised the options between 1 April 2014 and 31 March 2015 and during this year the Naspers share price surged to a high of R1 870 a share.
The share is currently trading at R1 736.
The fact that Bekker had exercised the 11,7m options was disclosed in the latest Naspers annual report. No Sens announcement was issued, as Bekker was not a director of the company during this period.
Bekker retired on 31 March last year and only recently assumed the position as chairman of the company.
The 4,7m shares Bekker still own are worth R8,1bn.
- This article was first published on Moneyweb and is republished here with permission