The company states that tranche 3 "Moreover, the exercise price aligns with the exercise price of $0.10 for 142,328,948 listed options, that if exercised would deliver to the business capital of circa A$14.2 million in additional cash to progress the Agbaja Cast Steel Project."
Wow this is too cute by half. Do the Board of Directors think we came down in the last shower or something? The tranche 3 options have a life span of 5 years, yes you read it 5 years. The company is trying to fool shareholders into thinking the tranche 3 options are comparable to the options that shareholders own that only have 1 year left to run.They clearly are not!
So if the company genuinely wanted to align their interests with shareholder interests then they would have made the options they are gifting themselves have the same life span, that is all tranches of options should lapse on 15 December 2021. This would align shareholder interests with directors interests. I mean who really cares if directors convert their gifted options in 2025, it won't make any difference to the outcome of the company. We will either be broke or producing steel by then. The Directors should align these odious and egregiopus options with shareholder interests by giving them a 1 year expiry date!!
Now the Board of Directors know the value of the options they are gifting themselves, they simply aren't sharing this information with shareholders, why would that be? It couldn't be that the proposed gifted options are extremely generous could it?
Furthermore the Board of Directors have stated that "the directors seeking election would be unable to proceed at the current levels of commitment if the options were not approved by the shareholders." This implies that the directors would be working harder above their base salary if they get their options. Well don't you think the Board of Directors should tell us how much harder they are going to work? At the moment we have no idea what the difference is between what they would do on the base salary compared to what they would do with the options. Except of course they will not do anything for the base salary because they will leave if they don't get their options. So why pay them a base salary at all? What do shareholders get for these Directors, who get gifted highly valuable options, for paying them a base salary? So how's about the Director's revoke their base salary and just take the options, do you think they would offer that instead?
If getting the options makes a difference and they would lift their workload, why wouldn't you doing the work anyway as that is what you are supposed to do as directors, increase the value of the company. The more I think about this the more outrageous it becomes, the Board of Directors have informed shareholders that they will not work in the interests of shareholders if they do not get their gifted options!!
Lord knows I hate to agree with drarthur, but he is right in pointing out that there is nothing stopping the directors selling the converted gifted options to fund the conversion of other gifted options. Why isn't there a clause escrowing any converted options?
The company also states that "there has been acceptance of the scheme by the sample of shareholders who have made contact to date", must be a pretty small sample or is the Chairman only taking calls from people he likes? When was the options scheme devised? How long has the Board of Directors been hatching this plan?
The Board of Directors have clearly outlined that there is a difference between the work they would do for their base salary compared to the work they would do for the options. Then why doesn't the Board also outline what these different work platforms are so that shareholders can see that they are getting value for money for the gifted options that the directors know the true value of? They know the value of these options and they are trying to hoodwink shareholders, worse they are holding shareholders to ransom over these options.
Don't vote for the options, they stink!
KFE Price at posting:
2.2¢ Sentiment: None Disclosure: Held
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