06.11.13 1:59 PM ET
Booz Allen Vice Chairman McConnell, Former Government Official, Nets $1.8 Million on Stock Sales
Edward Snowden’s decision to leak sensitive government information has shed new light on the highly profitable relationship between America’s national-security apparatus and Washington, D.C.–area contractors who get paid handsomely to assist the government. Data lying in plain sight can show just how lucrative this relationship can be for top security officials.
Snowden was a low-level employee of Booz Allen Hamilton, a contractor that derives most of its revenue from the government. John Michael McConnell, a former head of the National Security Agency and former director of national intelligence, is one of the most senior employees of Booz Allen. He’s currently the vice chairman.
McConnell joined Booz Allen in 1996 after having spent four years as head of the NSA. According to the company, he “led the development of the firm’s Information Assurance business and the firm’s Intelligence business focused on policy, transformation, homeland security, and intelligence analytics, rising to the position of senior vice president.”
In 2007 he returned to government employment when President Bush selected him to be the second director of national intelligence (a bureaucratic position created out of the 9/11 Commission to manage bureaucracy). According to excerpts of Dana Priest and William Arkin’s Top Secret America: The Rise of the New American Security State posted by The Washington Post, as DNI, McConnell pushed for increases in intelligence contracting. After serving as DNI, McConnell returned to Booz Allen in 2009 as executive vice president in charge of the firm’s intelligence business. In 2011 he was named vice chairman of the company.
Booz Allen has had great success in gaining government contracts. The Associated Press reports that 23 percent of its revenue, $1.3 billion, came from intelligence agencies in 2012.
McConnell is well compensated. According to the company’s proxy statement (see page 33), he has received a salary of $1.05 million for each of the last three years. In addition he has received stock and stock options.
This year McConnell has been monetizing those options at a rapid clip. Since January 15, according to Yahoo Finance, McConnell has exercised options on shares and sold the shares the same day on eight occasions. For example, on January 15, he exercised options on 21,390 shares of the company at $6.08 a share (for $130,051) and then sold them at the then–market price of $14.50 ($310,155), netting a profit of $180,104. And so on. So far this year, through automatic sales plans, he has exercised options on 213,890 shares and sold them the same day for a total profit of $1.8 million. McConnell still holds about 40,000 shares of Booz Allen Hamilton.
Nice work if you can get it.