I received a reply from the company today regarding the above and boosta's post.
I don't think its sensitive so I'll post the reply.
Dear Mick,
Thank you for your email and your support towards Beston Global Food Company.
To answer the questions from your email:
On the relationship between BPAM and BFC: While Dr. Roger Sexton and Stephen Gerlach are on the board of BPAM, there are
independent members in the board of BFC (Petrina Coventry, Jim Kouts and Don Taylor) who make independent decisions on behalf of BFC.
On management fee: The remuneration arrangements that have been established under our external management structure
aligns the interests of our management and staff with our shareholders, so that they get rewarded when our shareholders get rewarded. Most of our executives and senior staff receive take-home salaries which are well below market levels. Part of any outperformance fee payable to BPAM is therefore shared with these staff as a way of
topping up their salaries to levels closer to market. The outperformance rewards are paid in shares, not cash, in order to further align employees with the interests of our shareholders.
Quoting an article from Grant Thornton:
- Research shows companies that reward employees with shares are more productive and more profitable. Giving your employees a stake in the company can be an effective way of engaging them and aligning their interests with those of the business.
- The MacLeod Review of Employee Engagement, commissioned by the Government, determined that organisations in the top quartile for employee engagement showed 18% better productivity, a 12% improvement in customer ratings, a 37% reduction in absenteeism, as well as being 16% more profitable than others.
- When employees understand the impact of their personal performance on the value of the business, ownership of company shares can motivate them to be more productive and innovative, as this will increase the financial value of the capital they hold in the business. This in turn will help a business to achieve its growth aspirations.
- Source:
http://www.grant-thornton.co.uk/en/Thinking/FD-Intelligence/Issues/Guide-to-rewarding-employees-with-shares/#sthash.TFBNSJJN.dpuf
As explained at the time of our IPO and again in our Half Year Report, BPAM was not reimbursed at the time of IPO, other than very partially, for the considerable expenditures incurred over a period of more than three years in establishing and growing BFC to the point of its public listing. BPAM also negotiated and acquired a number of significant assets over this period at substantial discounts to their replacement value (such as the United Dairy Power assets) which were then included in the IPO at cost, so as to share the capital gain benefits with all shareholders.
Moreover, as explained in the Half Year Report, BPAM currently subsidises the running costs of BFC, and will need to continue to do so for some time, from which other shareholders are benefitting. If the management costs of BFC were internalised, shareholders would incur considerably greater costs for the operations of BFC than under the present external management arrangements.
As evidenced by our operational achievements and various new initiatives in the Half Year Report, much has been achieved at Beston Global Food Company since our IPO. We have an unswerving commitment to become one of the world’s leading food and beverage companies with a focus on supplying healthy nutritious foods to the world’s growing consumer markets. In doing so, our aim is to build value into BFC, and hence for our shareholders.
Kind Regards,
BGFC Investor Relations Team
(20min delay)