Shapiro sells Monsanto stock

Rick Desloge / St. Louis Business Journal 13mar98

Unloads 152,000 shares worth $7.6 million

Monsanto Co. Chairman and Chief Executive Robert Shapiro and a group of senior executives at the biotech company last month sold off shares to help cover taxes on previous stock options.

In a series of sales on Feb. 20, Shapiro sold 152,000 shares at prices ranging from $49.50 a share to $50.062 a share, or roughly $7.6 million worth, according to a recent federal securities filing.

Monsanto said in a statement that Shapiro and the other executives -- vice chairman Nicholas Reding, president Hendrik Verfaillie and senior vice president and general counsel William Ide III -- made similar stock moves, using a portion of their gains to cover taxes on the deals.

The dealings did not surprise Monsanto analysts. They pointed out Monsanto has paid its top execs heavily in stock options.

"They were quite well compensated with a program that encouraged them to push the price of the stock," said Tore Stole, a chemical industry analyst with A.G. Edwards & Sons. "During the past three years, the stock has gone up threefold -- from the mid-teens to more than $50 a share."

Monsanto shares closed at $51.062 Wednesday, near their 52-week high.

The company had earnings in 1997 of $749 million, an increase of 11 percent, on sales of $7.5 billion.

Stole said he expected Monsanto to unveil another lucrative stock compensation package when it issues its 1998 proxy statement in the next few days.

"Certainly (Shapiro) and his team have created a lot of value. Monsanto is trading at a premium compared to other stocks in their field," said Doug Groh, a chemical industry analyst with Merrill Lynch in New York.

Monsanto froze base salaries for most of its senior executives in November 1995 for a three- to four-year period, except to recognize increased responsibilities or major changes in competitors' pay levels, according to the company's 1997 proxy. The company also has issued several stock programs for its senior executives, including programs that link pay to both increases and decreases of Monsanto's stock price.

Monsanto said its goal is to pay at or above the top quarter of people in the industry, provided Monsanto hits certain targets -- primarily net income and return on equity targets.

Shapiro, 59, received $2.9 million in salary and bonus in 1996, the most current information available. Among Shapiro's stock awards was one for 62,500 shares -- worth $3.12 million -- that vested last month, but only if Monsanto achieved more than a 20 percent return on equity for 1997.

Monsanto hit the target.

Monsanto spokeswoman Scarlett Foster said Shapiro used the proceeds from his sale to cover tax payments associated with a previous stock option he exercised. Shapiro also had 39,031 shares withheld to satisfy tax withholding obligations that came with stock that vested Feb. 26.

"The cumulative effect," according to the statement, is Shapiro boosted "the number of Monsanto shares he beneficially owns, now totaling more than 934,000."

Shapiro had direct ownership of 930,142 shares of Monsanto stock worth about $47 million at the end of last month, according to the federal filing. This figure includes 634 shares acquired under the company's dividend reinvestment plan.

Reding, 63, sold more shares that Shapiro -- 220,000 -- primarily to "pay the taxes associated with the exercise," the company said in a statement. Reding continues to hold more than 356,000 shares worth more than $18 million. The company announced Wednesday Reding would retire May 1.

Verfaillie had 29,096 shares withheld to pay the exercise price and to satisfy tax withhold obligations, the company said. He now holds more than 231,000 Monsanto shares worth more than $11.5 million.

Ide had 7,909 shares withheld, according to the company. His Monsanto holdings are worth more than $2.6 million.