(Originally published in Herb Greenberg's Reality Check)
SAN DIEGO (TheStreet) -- From the there-ought-to-be-a-law department. On Feb. 3, nine insiders at multi-level marketer Usana (USNA), including CEO David Wentz, got some good (no, make that great!) news: They had received a slug of what appear to be well-priced stock-appreciation rights.
The idea behind these grants, according to the company's proxy, is "to drive long-term Company performance as well as individual Executive performance."
The last time they were handed out was in July 2011. Before that, April 2010.
The difference between now and then: Then, in 2011, the grant was made the day after earnings were released. In 2010 they were made the day earnings were released. This time they were made the day before earnings were released. Wouldn't you know it? This time earnings were much better than expected and the shares soared 19% on the news. (The stock-appreciation rights were priced just before the stock rose.) Last time, in 2011, earnings weren't good enough to keep the shares from sliding 11%. (The stock-appreciation rights were priced just after they fell.) And in 2010, the stock rose 8%.
Funny how that works.
A Usana spokesman pointed me to the company's proxy disclosure which, in effect, says the stock-appreciation rights, which are doled out by the compensation committee of the board, are priced on the date they're granted and approved. They vest over either a five-year period or, as is the case with Wentz and several others, over the last two years of the five-year term that, for the most recent grants, start vesting in 2016.