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Xerox pair cashes in on options
Stock-sale plan brings in millions for Mulcahy, Burns
February 2006 – Two of Xerox Corp.’s top executives executed stock sales recently that netted them millions of dollars.
A company spokeswoman said the sales are part of a planned selling program adopted by Chairman and Chief Executive Anne M. Mulcahy and Ursula Burns, president of Business Group Operations.
The Rule 10b5-1 plans, as they are known, are designed to remove executives from sales decisions and let third-party money managers make them instead, based on predetermined formulas.
Mulcahy exercised 377,023 stock options on Jan. 30 and then sold the shares at an average price of $14.01, according to documents filed with the Securities and Exchange Commission.
The options have an exercise price of $4.75 a share, so Mulcahy made nearly $3.5 million.
Also on Jan. 30, Burns exercised 211,231 options and sold those shares at an average price of $14.01, according to SEC documents. Those options also had a $4.75 strike price, so Burns made almost $1.96 million on her sale.
Mulcahy still owns more than 550,000 Xerox shares. Burns has more than 107,000.
A window for stock sales by executives opened two business days after Xerox reported earnings, spokeswoman Christa Carone said. “(The plans) are set up to sell quarterly, no matter the price,” said Carone.
Ulysses Yannas, a broker with the New York investment house Buckman Buckman & Reid, said the sales do not alarm him because neither executive sold the stock at its recent peak. “If they had done it when the stock was at $18, it might have bothered me,” he said.
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