Dillard's Executives Stay Active With Stocks Before Dividend Payments

by Arkansas Business Staff  on Monday, Dec. 10, 2012 12:00 am  

Dillard's President Alex Dillard controls 980,346 of the department store's shares, awarding him $4.9 million for the dividend payment just in time for Christmas.

The Dillard family and some Dillard’s Inc. directors have been buying and selling shares of Dillard’s stock since it was announced on Nov. 26 that shareholders would receive a special one-time cash dividend of $5 per share before the end of the year.

Shareholders as of Dec. 7 will receive the record dividend payment on Dec. 21.

By digging through Securities & Exchange Commission filings, we found that:

On Nov. 27, CEO William Dillard II and his younger brother President Alex Dillard each exercised stock options to buy half a million shares at the exercise price of $25.74, or a total cost of $12.87 million. On the same day, each man then sold 299,972 shares at $87.98 per share, bringing in $26.4 million for shares that only cost them $7.72 million and leaving each with new shares instantly worth $17.6 million and generating more than $1 million from the special dividend. Nice.

All together, Bill Dillard directly owns 1.03 million shares, which would put a total of $5.14 million in his bank account when the dividend is paid.

And Alex Dillard controls 980,346 shares, awarding him $4.9 million for the dividend payment just in time for Christmas.

William and Alex’s other brother, EVP Mike Dillard, exercised options on 300,000 shares at $25.74 for $7.72 million. He then sold 179,741 shares for $15.89 million, giving him $8.17 million in cash and new shares worth another $10.6 million. He directly owns 608,955 shares for a total payout of $3.04 million when the dividend is paid.

And don’t forget that William, Alex and Mike own 27.4, 27.9, and 26.3 percent respectively, of W.D. Co., which owns more than 4 million shares of Dillard’s stock. W.D. Co. will receive more than $20 million from the dividend windfall.

The sister of the Dillard’s brothers, Drue Matheny, who is also an EVP at the company, exercised options to buy 300,000 shares for $7.72 million and then doubled her money by selling just 164,861 of those shares for $14.57 million. She retains direct ownership of 433,474 shares, giving her $2.17 million in dividend payments.

Another Dillard’s official who jumped in on the trading action is CFO James Freeman, who exercised options to buy 60,000 shares at $25.74, or a total of $1.54 million. He sold 33,024 of those shares at $87.98, or $2.06 million.

Freeman currently has 521,266 shares, awarding him $2.6 million when the special dividend is paid.

Director Warren Stephens exercised options on 25,000 shares on Nov. 30. He bought the shares at $25.74 and sold them for an average price of $89.12, giving him a profit of $1.58 million. Through Stephens Investments Holdings LLC, Stephens owns 121,536 shares of Dillard’s, which will generate $607,680 from the special dividend.



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