Further to my post 59169104, my view is that part of the reason for NEA not yet being profitable relates to management style, and the incentives that drive management, which inclines them to ignore expenses.
“The Rich Boss who generated the largest shareholder return was Robert Newman, the chief executive of Nearmap, a technology company that provides high resolution aerial imagery and location data services to businesses and governments.
“Started in Perth in 2007, the company's stock has climbed more than eight-fold in the last eight years; it produced a total shareholder return of 185 per cent in the 12 months to February 5. Mr Newman has a stake worth $16.6 million.
“Mr Newman's total remuneration in the 2018 financial year was just $1.1 million, making him a great value CEO too.”
I only glanced at the targets set for NEA's management to earn bonuses, but I recall, because it surprised me, that there was a TSR (total shareholder value) component. For a loss-making company, this means bonuses can be earned in years if the SP rises on the basis of a good story that highlights good news and down-plays, or ignores, the bad news. My current view is that NEA's incentives have an element of dysfunction, because there is little incentive to reduce expenses. I would need to study the issue before being too emphatic about it.
NEA Price at posting:
$1.25 Sentiment: Hold Disclosure: Held
