For a long time, Check Point (Nasdaq: CHKP) CEO Gil Shwed has received no salary (beyond the minimum wage), and no bonus, but allocations of options only, at his request. The aim is to create alignment between Shwed’s compensation and the interests of the other shareholders. If the share price rises, both sides benefit.
A US Securities and Exchange Commission filing indicates that Shwed will now sell 1.3 million Check Point shares - from options allocated to him in 2017 - for some $200 million. The exercise price of the options is $115, the share price at the time they were allocated, giving Shwed a gain of about $48 million. The actual gain will depend on the share price at the time of the sale. According to the filing, this will be a blind sale, at a preset date, and not within the seller’s control.
Even after the sale, Shwed will remain the largest single shareholder in the veteran cybersecurity company. At the end of 2023, Shwed had a 25.3% stake, currently worth $4.5 billion. There are no other parties at interest in Check Point, i.e. shareholders with holdings of 5% or more. Shwed generally does not sell shares, but only options that from time to time as they expire.
Check Point has a market cap of $17.1 billion. Earlier this year, its share price reached an all-time high, but has since fallen 9%. In February, Shwed announced his intention of stepping down from the CEO role, after three decades in the post, and becoming executive chairperson of the company. So far, however, no successor to Shwed has been announced, and there is no deadline for his change of role.
Published by Globes, Israel business news - en.globes.co.il - on May 13, 2024.
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