United Therapeutics Execs Profit While Stock Slides

On Nov. 24, the company reduced the exercise price of those options to that day's closing price of $50.63 a share.

Instantly, option grants that had been underwater, or rendered worthless, because of the failure of oral Remodulin, were transformed back into options that, today, are in the money.

In a filing to the Securities and Exchange Commission, United Therapeutics said the lowering of the exercise price of the executive option grants was "intended to provide executive officers with the opportunity to hold awards with a greater potential to increase in value over time, thereby creating long-term incentives for them to remain with the company and contribute to the attainment of its business and financial objectives."

Company spokesman Andy Fisher declined to say anything more than what's stated in the SEC filing.

The strike price of 1.4 million additional stock options granted to United Therapeutics executives, managers and employees was similarly lowered to $50.63 a share in a related move by the company's directors on Nov. 24.

As well, directors approved a plan to exchange newer, lower-priced options for 2.1 million options granted to United Therapeutics employees and executives that are currently underwater.

The repricing of underwater options has long been a tactic employed by Silicon Valley technology firms. During the dot-com bust of 2001, tech stalwarts like Apple(AAPL Quote) allowed employees to swap out new, cheaper options for those that rendered worthless by steep declines in the value of the company's stock.