Doin' the Perp Walk.(Dennis Kozlowski indicted in securities crime)(Brief Article)

Recently, the president of a large division of a large media company was given his walking papers. Nothing personal, of course. The guy was good at his job--or as good as anyone tasked with the same pointless responsibilities in a doomed enterprise. But the chairman had just installed a new president under which the fired guy's division nested, and the new guy wanted fresh blood. Or maybe just blood.

Anyway, the new guy runs a bony finger down the organization chart and silently ticks off the names of everyone senior enough to gun for his job and fires them, leaving only terrified eunuchs. But firing people costs money--there are contracts, you see, and stock options--so he has to be very careful to fire only those who pose an actual threat, by dint of their intelligence or courage or originality or some other personality defect.

So the old guy is out and knows it. He's not bitter. Being fired proves his value. But he is more than a little broke. He has a house in the Riviera section of the Palisades (the best address in town, trust me), a vacation place in Telluride, two kids at the Crossroads School and a wife who has confused "having a job" with "writing a novel." The financial ace up his tattered sleeve is a bushel of stock options that, even post-bubble, are "in the money." So right after he gets his walking papers he calls his old friend, the chief financial officer in New York.

"Hey, buddy," he probably puts it, "you and I go way back, we're pals, our wives and kids know each other. I've got these options to cash in. I know you can't legally tell me exactly what to do, but I'd appreciate it, since we've been friends so long, if you'd indicate whether I should exercise them now, or if the rumors I hear are true and there's going to be a buyout of the studio, thus increasing their value tenfold and making me a very rich man (a rich retired man). Should I wait? What do you say, pal o' mine?"

There's a long pause on the line. And then the CFO says, "My friend, I shouldn't tell you this, but just because you're you, I'll tell you unequivocally that it doesn't matter."

"So I should exercise the options today?"

"I'm telling you that it won't matter one way or the other."