July 26, 2002 1:50 PM PDT
Dividing Palm wants a reverse stock split
Palm's shares, which reached as high as $160 on the first day of trading in March 2000, have been trading below $2 a share since May and have not closed above $5 a share this year. The stock closed Friday at $1.36, off 8 cents, or more than 5 percent, for the day.
Palm's directors unanimously agreed to a request that shareholders give approval to a reverse stock split in the range of 10-for-1 to 20-for-1, meaning shareholders would exchange somewhere between 10 and 20 current shares for one new share.
The request, which would ensure that shares stay above Nasdaq's required $1 minimum, will be put before shareholders at Palm's annual meeting on Oct. 1. Approval would allow Palm's directors to implement a split within the specified range any time before April 1, 2003.
While reverse stock splits can boost share prices for a time, experts say the results are often temporary, with many stocks often continuing their skid after such a move.
Palm shares fell further in after-hours trading on word of the reverse split, changing hands recently at $1.16 on the Island ECN.
Separately, Palm filed its annual proxy statement Friday, detailing payments to both its current executives as well as several executives who have left the company in the past fiscal year, which ended May 31.
The company said it paid Interim CEO Eric Benhamou $284,375 this year. David Nagel, CEO of PalmSource, the company's operating system subsidiary received $432,213 in salary, while Todd Bradley, head of Palm's device business, received $514,596. Nagel and Bradely also received restricted stock awards.
As for departed employees, Palm said it paid $1.4 million in salary and other benefits to former CEO Carl Yankowski who was replaced as chief executive last November. Palm also agreed to pay $365,000 and other benefits to former Chief Marketing Officer Satjiv Chahil, who is now a consultant to the company. Palm did not disclose what it is paying Chahil in his new capacity, but said it is at an hourly rate. Both executives also received accelerated vesting of stock options.