The CEO of Eastman Kodak was reportedly granted options for 1.75 million shares the day before the company was given a $765 million manufacturing contract from the U.S. government.
According to a report in Reuters, the arrangement with the company’s board to grant the options was not previously made public or listed in Jim Continenza’s contract. A source told Reuters that the stock options were given to Continenza to shield his overall stake in the company from a bond deal in May 2019.
But the day after the options were granted, the company announced its deal with the Trump administration to begin manufacturing critical drugs in the U.S., and shares for Kodak soared by over 1,000 percent. According to Reuters, the value of Continenza’s options then increased to $83 million — without the additional options he would have seen an increase in gains of $53 million.
Analysts have stated that the value of Continenza’s stock options are currently on paper only. But Reuters notes that 29 percent of the options could be vested and cashed out immediately.
This is not the first time that executives at a pharma company have experienced fortuitous timing when it comes to their personal stocks and news related to the coronavirus.
The New York Times notes that insiders at Vaxart received stock options just before it was announced that their coronavirus vaccine candidate was being tested in a federally run program, which doubled the value of their shares.
Several execs at Moderna also raised eyebrows in May after raking in $29 million in gains from selling some of their company shares, just two days after announcing encouraging early results from a trial of its coronavirus vaccine candidate.
The loan for Kodak was given by the U.S. International Development Finance Corporation as part of the White House’s broader efforts to reshore manufacturing.
