" In reality, assuming approval, it is a humungous pay rise."
You're absolutely correct in one sense, but at the same time absolutely wrong, IMO. Shareholders need to think this one through carefully.
Let's look at the facts about those forgoing salary (whether or not deferring receipt of grant of options).
1. There is no approval as we speak. 2. Receipt of a salary requires that there be an employer able to pay that salary. The company may have disappeared from existence by this time next week if the doomsayers are correct & there are few safety nets for employees (none for Board members). By that yardstick, any salary received in the meantime is an advantage to those not taking a cash reduction. 3. In biotech world the salaries of CEO, COO and execs, and fees of Board members (including STIs and LTIs) prior to the cost-cutting were not inflated or out of sync with competitors in the same market. 4. The company's competition doesn't lessen over time - it increases with approval, as the company grows out of R&D and into a slice of others' market share i.e. the risks to success proliferate (even as they are being addressed & revenue is being applied). 5. Competitors of the company have become insolvent. Recently. 6. And regarding those LTIs, there's still a strike price to be paid back to the company on the exercise of options (failing which they expire without further compensation). I think all MSB holders can agree that this is a little different from the way wages work
As I see it, it is only from an ordinary shareholder perspective - and, even then, only one who like you and I is a sufficiently long-term holder - that one can even see a possible 'humungous' value realisation in some future. For evidence that's so, just look at the SP this morning. I am certain there are traders selling right now who aren't taking that longer term view. In fact, they probably don't see the company at all, just a set of numbers on a page, so what 'future' would there be for them?
When you look around at other stakeholders in MSB, there's no analog for the deferring executives and employees in, say, an MSB creditor role, because there's no interest accruing, and no priority to those option-holders in a winding-up (& also see my comment on strike price payment above).
No, the only MSB stakeholders IMO, whose position is closely analogous to the deferring execs etc are actual long-term holders, and even here there's a advantageous difference in favour of current holders i.e. that current holders have no further payment to make to the company in connection with their shares.
It doesn't matter which way one slices it - as I see it - anyone who forgoes cash in the hand for the opportunity to pay later for a bird hidden in a bush, is not really receiving a 'humungous pay rise'.
In reality, these execs/ employees are becoming an investor in the company's future (if they're not already). And they are paying for it right now in hard, cold cash forgone. And will pay some more later if they want to stay in it. They immediately become the least privileged of all stakeholders in MSB.
In the short term, that's obviously good for corporate MSB, by whatever fiscal or economic measure you choose to use. It enhances survivability, should align with productivity etc.
Whether in the long run the exercise of those LTIs and STIs is 'good' for the company's stakeholders, depends IMO on how long that long run is to approval & the option-holders accountability to MSB for an appropriate sense of urgency to the company as a whole. But either way it does involve an employee taking a risk that - as employees - they don't have to take otherwise, because it's simply not in the contract.
And we all know that in reality ONE DOES NOT SIMPLY ASSUME APPROVAL (all credits to Sean, naturally).
So yes, as a long-term holder I'd rather MSB pay its labour debts from debt or revenue rather than new equity, however low on the chain of entitlements that new equity may be. But it is what it is.
(20min delay)