Page 261 - Executive Warfare

The New Bosses

dle off the cliff with all your peers, your personal wealth may wind up at
zero minus the money you spend defending yourself in court.
Perversely enough, however, it’s difficult to rid yourself of this tempta-
tion by diversifying your investments. That’s because Wall Street frowns
on insiders selling any stock. The irony
of this came into sharp focus for me
once at a cocktail party when a big THE LURE OF
investor came over to me.“Stand here,” USING SOME
he said to me. “I want to get my wife.” LITTLE TRICK TO
He brought her over. “This is David PROP UP YOUR
D’Alessandro. He has made us rich COMPANY’S SHARE
three times.” From the time we had our PRICE CAN BE
IPO to the last day of trading before OVERWHELMING,
our merger with Manulife Financial ESPECIALLY IF YOU
closed—slightly over four years—John OWN A LOT OF
Hancock’s stock went from $17 a share STOCK OPTIONS
to $43.75. THAT WILL BE
The reason he’d said three times is UNDERWATER IF
that he’d moved in and out of the stock THE SHARE PRICE
that often, selling on the rises. Mean- DECLINES.
while, he was the first guy to complain
if any of my executives sold a share.
“They’re losing confidence in the company,” he’d wail.
I always endorsed the idea that if you want to sell the stock, sell the
stock. You’re certainly a lemming if you participate in any trickery to
boost your organization’s stock price, so don’t be a lemming when it
comes to your stock holdings, either. Cash out when you can. Reap the
benefits of your hard work all along the way, because nobody can live on
paper wealth.
If the value of your company stock plummets overnight—as it did in
2008 for the employees of Bear Stearns during the subprime mortgage melt-
down—you’ll soon discover that paper has no nutritional value whatsoever.

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