Mobileye's "smaller" investors become millionaires

Mobileye Photo: PR

Rafael to pay state NIS 444m dividend

A huge $1.2 billion in options will be shared out by Mobileye's 600 employees and directors.

The biggest beneficiaries from the sale of Mobileye(NYSE: MBLY) to Intel will obviously be its two founders, chairman Prof. Amnon Shashua and CEO Ziv Aviram, and Dr. Shmuel Harlap, a controlling shareholder in auto importer Colmobil. The wealth generated by Mobileye, however, is not confined to these three. Its beneficiaries include a considerable number of Mobileye senior executives and its 600 employees. The company's option plans listed in its annual documents gives an indication of the extent of this wealth.

These plans benefit primarily the two Mobileye founders and its senior management, but it is reasonable to assume that the other employees also derived some benefit from them. The price of Intel's acquisition of Mobileye, $15.3 billion in cash, reflects all the company's share capital, including the shares that will be issued immediately after the deal is closed in respect of the exercise of the all the options granted to employees. A check by "Globes" shows that these options reflect a huge $1.2 billion (NIS 4.4 billion) pre-tax value.

Another interesting figure is that two thirds (66%) of the options were distributed at strike prices substantially lower than the $25 share price in the company's IPO. In other words, the strike prices are negligible, especially in comparison with the share price at which the company was sold. These options, which were granted to employees when Mobileye was still a private company, reflected its value before it became a public company. Furthermore, in the 30 months since the company's IPO, options were exercised reflecting a total benefit of $500 million. "Globes" calculated this benefit on the basis of the average share price on the market during the entire year.

In its documents, Mobileye discloses the holdings of company directors and senior officeholders classified as parties at interest. It is important to note, however, that some of the managers already sold their holdings after Mobileye's IPO, and that these holdings do not necessarily reflect the wealth accumulated in the company. The most senior manager is senior VP and CFO Ofer Maharshak, who joined the company a decade ago after leaving Lipman Electronics Engineering, sold to Verifone. Maharshak's current holding is worth $7 million. A check by "Globes" revealed that he has sold shares for $12.8 million to date, meaning that he accumulated at least $20 million (gross, before taxes).

The directors, whose names are familiar to the economic press, were not neglected, either. The first is Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) CFO Eyal Deshe, a director in Mobileye since before its IPO. His holdings are worth $6.4 million (gross). Another one is Eli Barkat, appointed as a director immediately following Mobileye's IPO, whose holdings are worth $1.3 million. Barkat made his pile out of the BRM Capital venture capital fund - the first investor in Check Point Software Technologies Ltd. (Nasdaq: CHKP). The last one is Judith Richter, one of the owners of stent manufacturer Medinol. Like Barkat, Richter was appointed as a director on the occasion of Mobileye's IPO, and her holdings have the same value as Barkat's.