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Options Reap Hendricks $50M June Profit

Discovery’s Stock Gains Mean Bigger Option Profits for Founder 7/12/2013 10:27 AM Eastern

Discovery Communications founder and executive chairman John Hendricks hit the stock option jackpot in June, selling more than 750,000 shares of company stock for an eye-popping profit of $50.8 million.

Hendricks, who launched the Discovery Channel in 1985 with a $5 million investment from several investors, has been cashing in his options regularly for the past few years. And the recent run in Discovery’s share price – the stock is up 33% this year and 104% in the past 24 months – is the primary factor in the big jump in options profits for the Discovery founder.

According to documents filed with the Securities and Exchange Commission, between June 5 and July 9 Hendricks exercised options for 754,636 shares of Discovery stock at a strike price of $14.53 each. He then sold those shares over the next 35 days at prices ranging from $73.23 and $82.91 per share.

This year was his best yet – in 2012, Hendricks exercised a total of 954,490 options at $14.53 each, selling them between Jan. 19 and March 27 for prices ranging from $44.77 and $48.86 each for a profit of $31.1 million.

Discovery officials declined comment. 

Hendricks still owns a large chunk of Discovery stock – he held about 1.04 million shares of the company as of July 9, according to the SEC documents. The sales were automatic sales, made through via SEC Rule 10b5-1, which allows executives at public companies to sell their shares at a predetermined price and time. Holders of 10b5-1 trading plans have no knowledge of when trades will be made, which shields them from any hint of insider trading violations. Most top executives of publicly traded companies utilize the plans.

While he has stepped away from Discovery’s day-to-day operations – those are handled by CEO David Zaslav – Hendricks has been an active philanthropist and serves on the boads of several charitable organizations, including the John and Maureen Hendricks Foundation, which has pledged more than $23 million to various groups in the past decade. http://www.multichannel.com/distribution/spreading-wealth/144179

 

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