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Netscape CEO opts out of options

Jim Barksdale elects to return to the company a stock option grant of 300,000 shares, Netscape's proxy statement says.

Netscape Communications' chief executive Jim Barksdale, who earned only $1 last year in compensation, elected this month
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Jim Barksdale
to return to the company a stock option grant of 300,000 shares, Netscape's proxy statement revealed today.

Word of Barksdale's generosity came on the same day that the company's shares jumped nearly 6 points based on renewed speculation that it would be bought by Sun Microsystems. Neither company would comment on the matter.

The increase also coincided with a surge in Net stocks across the board. Netscape increasingly is turning to its Web site to generate revenue now that it is giving away its browser for free.

A company spokeswoman declined comment on Barksdale's stock or salary, which CNET's NEWS.COM reported to be $1 last year. Netscape's proxy disclosed that, "In April 1998, Mr. Barksdale elected to return a stock option grant of 300,000 shares made in April 1997."

The 300,000 options had an exercise price of $27.50 per share, according to the proxy. They offered a potential realized value of up to $13.1 million, assuming Netscape's stock appreciated at a 10 percent annual rate for the term of the options.

The proxy shows Barksdale also was granted 200 shares last year at an exercise price of $37.875. Those shares would be worth upwards of $12,072 if the company's stock appreciated at a 10 percent annualized rate for the option term--still not enough money to buy a new Volkswagen Beetle.

In January, Netscape announced a disappointing quarterly loss and the first layoffs in the company's history.

"Mr. Barksdale believes that his compensation should be linked to the long-term interests of Netscape's stockholders," the proxy read. "Accordingly, through his ownership position in Netscape's common stock, Mr. Barksdale's pecuniary interests are aligned with those of Netscape's stockholders."

Barksdale, 54, is not hurting in the pocketbook, either.

According to the proxy, Netscape has an employment agreement with Barksdale in which he was "granted an option to purchase 8 million shares of Netscape's common stock at an exercise price of 5.63 cents per share. The option was immediately exercisable, with 4 million shares vesting upon grant and an additional 80,000 shares per month vesting thereafter.

The proxy shows that Barksdale owns 4.8 million shares in Netscape, equating to a 4.9 percent stake in the software maker.

That would put his net worth at up to $123 million, at least on paper, as of today's closing price. (The figure, however, includes "1,056,000 shares subject to a repurchase right of Netscape upon cessation of Mr. Barksdale's service to Netscape and 40,000 shares held by a family member," the proxy reads.)

Barksdale joined Netscape in January 1995 as president and CEO. He previously was CEO of AT&T Wireless Services and before that was executive vice president of Federal Express.

The proxy also showed that Netscape cofounder Marc Andreessen earned $250,000 in salary and bonuses last year, while executive vice president and general manager Mike Homer earned $275,000. Their salaries remained flat from the previous year, but their bonuses increased.

Netscape will hold its annual meeting on May 29.