Maybe some here are unawareTaxation law in Canada is such that when options are excercised in this manner, the difference between the prevailing stock price and the excercise price of the options is taxed as ordinary income.
The intrinsic value of the option is taxed, as of the date of excercise.
Your CEO excercised 1.2 million options on August 23rd at 58 cents.
The stock closed at $1.87 on August 23rd.
He just incurred an additional tax liability on $1,548,000 in ordinary income.
Why would he do that?
He will very likely sell shares to cover that.
He's probably paying a 53.5% combined federal-provincial marginal tax rate.
His tax liability will be around $800,000.
He'll have to sell about 430,000 shares at $1.85 to do it, unless he's already got it covered.