Issues I have with performance options/options generally not...

Issues I have with performance options/options generally not just an AJX specific.

1. Low Bar -

Often the bar to achieving them are set disappointingly low and does not send a signal of confidence to the market. It is almost like reading an insiders barometer.

If a high bar was established, as in a level of excellence was required I would be more conducive towards them.

2. Lead by example:

For me it is a leadership thing. Just like a parent/teacher your example is more than likely to be followed and tested.

I have seen another company where the MD was allowed an outlandishly generous partly paid option package by the board, which then became an annual event, or should I say annual feast.
Sure enough in time a newly recruited GM for Australia had his hand out wanting a similar options package, and then after entering a newly unproven UK market the UK Marketing manager had her hand out!

All these hand outs can quickly get out of hand!

3. Quantities

Often the large quantity of performance options granted when the company is young and the share price is low then becomes expected to be carried forward in the future when the share prices are higher. This gets expensive and hits the bottom line.

4. Too much carrot not enough rod!

I would like to see equal portions of rod and carrot in company incentive packages, so they are more aligned with what we as shareholders experience on the rocky ride of management performance.

You want options. Sure! We will vote for them if they are awarded at a fair strike price and if it is stipulated that they must be exercised in good and bad years.

This then not only incentivises the achievement of excellence by management whereby a strong share price makes exercising the options favourable, but also equally discourages poor performance in that it hits the managements back pocket if the share price tanks under the strike price.

If this were more the norm I expect the company AGM resolutions would generally become much smaller in number.