For a long time, Check Point (Nasdaq: CHKP) CEO Gil Schwed received neither salary (exceeding minimum wage), nor bonus, but only options allocations, at his request. The goal is to create alignment between Schwed's compensation and the interests of other shareholders. If the stock price rises, both sides benefit.
An SEC filing indicates that Schwed will now sell 1.3 million shares of Check Point stock — from options allotted to him in 2017 — for about $200 million. The exercise price of the options is $115, the stock price at the time of vesting, giving Schwed a gain of about $48 million. The actual profit depends on the share price at the time of sale. According to the filing, this will be a blind sale, on a predetermined date, and not within the seller's control.
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Even after the sale, Schwed will remain the largest single shareholder in the veteran cybersecurity company. At the end of 2023, Shwed held a 25.3% stake, currently worth $4.5 billion. There are no other parties of interest in Check Point, i.e. shareholders who own 5% or more. Shwed does not generally sell shares, but only options from time to time when they expire.
Check Point's market cap is $17.1 billion. Earlier this year, its stock price reached an all-time high, but has since fallen 9%. In February, Schwed announced his intention to step down as CEO, after three decades in the position, to become CEO of the company. But so far no successor to Shwed has been announced, and there is no deadline for changing his role.
Published by Globes, Israel Business News – en.globes.co.il – on May 13, 2024.
© Copyright Globes Publisher Itonut (1983) Ltd., 2024.
