Bidz.com’s CEO adopts stock pay plan, cuts salary to $1 a year

Online jewelry auctioneer Bidz.com’s chairman and CEO David Zinberg has tied his future pay to the company’s stock performance and cut his salary from $267,000 in 2006 to $1. Following an individual pre-arranged stock trading plan in accordance with Rule 10b5-1 of the Securities and Exchange Act of 1934, Zinberg designed a stock trading plan that he will be unable to influence once under way.

Rule 10b5-1 allows officers and directors of public companies to adopt written pre-arranged stock trading plans at a time when they are not in possession of “material, nonpublic information,” about the company, or in other words, insider knowledge. Once such a trading plan is established, the insider retains no influence over sales under the plan. Trades are executed through a broker according to the terms of the plan at later dates, regardless of any subsequent privileged information that the insider may receive.

In addition, Zinberg also is reducing his annual salary to $1 per year and he is not expected to receive any bonus or stock option grants. His total compensation of $485,875 for 2006 included a salary of $267,083 and bonus of $215,000. Bidz.com is No. 86 in the Internet Retailer Top 500 Guide.

Of the actions, Zinberg says, “Bidz.com was founded in 1998 and we are extremely proud of our achievements over the last nine years. We have shareholders who have been supportive of our efforts from the beginning as well as many new shareholders who have invested in the company now that we trade on the Nasdaq. I want to further align my interests with all of our investors and believe the best way to do so is to reduce my salary and tie my compensation to the performance of the company, which should result in share price appreciation.”

Zinberg has not previously sold any shares of his holdings of Bidz.com’s common stock or common stock underlying options, the company says. The pre-arranged stock trading plan was adopted to enable Zinberg to sell a portion of his shares of common stock -- and/or shares of common stock acquired upon the exercise of vested stock options -- over time as part of “his long-term strategy for individual asset diversification and liquidity,” the company says.