American Equity CEO uses stock options to trade 4,000 shares
September 6, 2013 by Victor Epstein
John Matovina, chief executive officer of American Equity Investment Life Holding, exercised some of his stock options Wednesday by purchasing 4,000 of its shares at $9 and selling them at $20.21, according to a new filing with the Securities and Exchange Commission. The transaction netted him about $44,840.
The SEC regulates the securities industry and requires insiders like Matovina to disclose trades involving large amounts of their employer’s stock.
Matovina, 59, had 105,693 shares of American Equity after the transaction was completed. The West Des Moines-based insurer trades under the AEL symbol.
The company is a leading issuer of fixed index and fixed rate annuities. Annuities are favored by financial planners because most provide a steady stream of income to policyholders after an initial period of investment, making them useful to retirees
Stock options are awarded to executives to give them an additional incentive for growing the value of the companies that employ them. They typically give the recipient the option of buying a set number of shares at a set price for a set period of time. Matovina has held the option of buying the shares he sold at $9 since June 30, 2004, when they closed at $9.95 each. The option was set to expire Dec. 4, according to an SEC document.
American Equity was recognized by Fortune Magazine as the 18th fastest growing company on the planet in 2012. Its operating income rose 11 percent to $30.3 million during the second quarter, when it had total assets of $37.3 billion.
Several insurance industry analysts have upgraded their price targets for AEL in recent months. They include SunTrust, which raised its target $2 to $25 on Aug. 21. Sandler O’Neill and FBR Capital Markets also raised their targets last month.
The upgrades occurred as AEL was using newly raised capital to buy-back some its own convertible bonds to limit the potentially dilutive impact on their share price. Convertible bonds can be traded in for shares of the issuer. When a company issues additional shares, its share price typically falls because its market capitalization or value is now being divided among more shares. AEL has a market cap of about $1.3 billion.
Shares of AEL were down four cents to $20.25 each Thursday in midday trading. The stock is up $8.04 a share, or 66 percent, so far this year.
