Lutz spends $1.1 million to raise GM holdings by 20%

By exercising stock options, General Motors Corp. Vice Chairman Bob Lutz spent $1.1 million Thursday to buy almost $1.7 million worth of GM stock and increase his holding of company shares by 20%, the company reported this morning.

A stock option is a financial instrument that lets its holder buy shares at set price, and they have significant value when that price is less than the stock’s current price. Lutz exercised options issued last year, allowing him to acquire 53,336 shares for $20.90 each, for a total of $1.1 million. The shares are worth a total of $1.68 million, based on a share price of $31.50.

Lutz also sold 5,502 of the shares at $31.50, or $173,313, according to a filing with the U.S. Securities and Exchange Commission.