CEO share selloff sends a2 Milk value down $450m
The value of The a2 Milk Company plunged by $450 million yesterday after its chief executive, Jayne Hrdlicka, sold all her shares in the company.
The ex-jetstar head who has been in the job only two months pocketed $4.36m from the sale.
Hamilton Hindin Greene investment adviser Jeremy Sullivan said shareholders would be disappointed by the selloff, which she has done in order to meet tax obligations.
‘‘It’s a little unusual for a CEO of such short tenure to be selling all her shares excluding options, and the market’s reacted pretty strongly.’’
Yesterday the company’s share price had fallen by 5.5 per cent to $11.81. In March this year it was New Zealand’s largest company by market capitalisation, when its share value hit a high of $13.99. Yesterday its market capitalisation was $8.7 billion.
In a statement to the New Zealand stock exchange, a2 Milk said Hrdlicka had sold the 357,232 ordinary shares she received as part of her incentive entitlements. Hrdlicka had received ‘‘time-based rights’’, which were a one-off benefit compensating her for when she had to forfeit incentive entitlements from her former employer as a result of her resignation to take up employment with a2 Milk. Hrdlicka had sold the shares in order to fund tax obligations relating to the recent automatic exercise of time-based rights and fund commitments made before taking up the A2 role.
She has preserved her right to options for 242,022 shares.
‘‘She’s a well-regarded CEO, but ideally if she found another way to meet her tax obligations shareholders would have been more pleased,’’ Sullivan said.
Hrdlicka had followed the protocol in regards to notifying the stockmarket.