Media executives ditch worthless share options

Share options given to top CanWest MediaWorks executives are being left to expire after the company's weak share price rendered them worthless.

Of around 2 million options issued in November 2004 to staff - thought to include key figures including presenter John Campbell - to buy CanWest shares at $1.78, just 11,000 have been exercised. Last month, 310,000 had lapsed.

Options give their holder the right to trade a security at an agreed-upon price during a certain time period and are often used as a staff bonus.

Shares in the company - which owns TV3, C4 and commercial radio stations - were issued at $1.53 in 2004 and on Friday closed down 4c at $1.45.

CanWest chief executive Brent Impey had not exercised any of his share options, said company spokesman Roger Beaumont, but held 100,000 shares bought when the company floated.

The 11,000 options had been exercised by "a variety of middle managers" when the share price was such that excercising options was largely equivalent to buying on the open market, said Beaumont.

He said exercising the options now would cost money but denied it showed the share price had not performed as expected.

"Those options were issued to reflect market conditions at the time," said Beaumont. "Clearly the price has softened."

"The company is structured as a dividend-rich company as opposed to a growth stock."

CanWest's share price hit a high of $2.44 in January last year, about a month after it announced RadioWorks' brand More FM was adding a further 15 stations to its stable.

It hit a low of $1.23 in August this year but has recovered somewhat.

Tower Asset Management portfolio manager Paul Robertshawe said investors were "spooked" by the large swings in earnings by the company's TV arm.

Robertshawe said the company was still relatively new to the NZX and investors were not used to the model.

"Probably the main issue is people grappling with the earnings volatility." TV businesses were more volatile than newspapers, he said.

CanWest is due to report its full-year results for the year to August 31 later this month.


CanWest

$1.53-a-share issue in July 2004.
$2.44 high hit in January last year.
$1.23 low hit in August this year.
$1.45 at Friday's close, down 4c.