Entercom Radio CEO’s stock sinks after big water death verdict
Monday, November 9, 2009
The $16.5 million verdict handed down by a Sacramento County District Court jury against broadcasting giant Entercom is fully covered by insurance, according to the company’s quarterly 10-Q financial statement filed with the Securities and Echange Commission today.
The damage award was granted when wholly-owned subsidiary Entercom Sacramento was found negligent in the death of Jennifer Strange, who died of acute water intoxication hours after taking part in a water-drinking contest at radio station KDND-FM (“107.9 The End”).
If the civil justice system serves as a deterrent to corporate misbehavior by hitting companies in the bank account, it can also impact individuals in the corporate hierarchy. Entercom president and CEO David Field has direct ownership of 975,871 shares of the company’s Class A common stock, according to the SEC Form 4 that was filed at the time of his most recent stock acquisition in May.
The value of his stock holdings went down more than $2.4 million between October 23, six days before the verdict was announced, and October 30, the day after the verdict was announced. (It’s not known if that was covered by insurance.)
The price per share of Entercom stock dropped 9.8% the day after the verdict, from $7.85 to $7.08. That one day alone saw the value of Field’s holdings fall more than $750,000. While the stock price rebounded somewhat the next trading day, it fell even lower in the wake of a disappointing third-quarter earnings report.
Field testified in a deposition shown to jurors during the trial that the “Hold Your Wee For a Wii” contest Jennifer Strange participated in “would never have been approved” had KDND’s promotions director had submitted it to the corporate legal department, which she was required to under company policy.
He said the contest (in which contestants drank bottle after bottle of water and the last one who had to urinate won the game system) was in “lousy taste.”