I'm studying for an organisational subject and I was reading the following paragraph:

August 2001

Jeffrey Skilling resigns after just six months; Ken Lay returns to day-to-day management of the company. Enron employee Sherron Watkins sends letter to Ken Lay warning of accounting irregularities that could pose a threat to the company. Ken Lay makes a presentation to employees Around the same time, he also cashes in many of his Enron share options.*

What does "cashing in many of his Enron share options" mean? Is it a bad PR stunt?

  • This article doesn't mention but IIRC, what was notable and rare about the Enron insiders' trades was that immediately after they dumped all their stock (and before it became public knowledge, which would have damaged the stock price), the board secretly replenished their stock or gave them a non-recourse loan so they could do it again, several times. While Lay kept continued to recommend owning the stock to employees. Sounds like a breach of fiduciary trust against all the other investors.
    – smci
    Commented Jul 18, 2018 at 23:15

2 Answers 2


"Cashing in" means converting to cash; selling his shares. The wrinkle is that he didn't actually have the shares at the time he wanted to sell them, only vested share options that he had been given as part of his pay. Therefore what he did was exercised his options to buy the shares and then sold them for cash. He may well have done this a slightly less formal route of selling the options back to the company at the current market price of the shares but essentially the highlighted text means that he sold his part ownership of Enron meaning that he no longer had "skin in the game" - his financial well-being was no longer linked to that of the company.

  • note to the edit: the "but essentially" clause contrasts the "He may well have" clause and is intended to provide the sentence with extended self reference. The sentence needs to emphasise the overall effect over the specific action so the edit harms the effect.
    – MD-Tech
    Commented Feb 9, 2018 at 13:52

It means he is committing act of inside trading: he sells his share options upon hearing news that may threat the company, before the knowledge is made public.

It doesn't have anything to do with PR because he makes presentation to employees only, not releasing any information to public.

  • It's true that's what he did, but that isn't the meaning of the sentence. It only becomes insider trading when combined with previous sentences. Commented Feb 12, 2018 at 17:38
  • I think OP highlighted part of sentence that made him not understand the whole context. Asking "Is it a bad PR stunt?" tells me that OP understand that this part of sentence have some bad meaning (combined with previous sentences) but doesn't understand what exactly.
    – Chaosu
    Commented Feb 13, 2018 at 13:22

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