Ann: Change of Director's Interest Notice - James Marsh, page-32

You have people in there who aren't board members. Are you talking about the BoD being overpaid, or is it now every senior staff member?

Note ii on "Share based payments" states: "Share based payments do not represent cash payments to key management personnel and the related shares may or may not ultimately vest. Valuation of share based payments was undertaken based on prevailing market conditions at the date of granting (see note 16) and are expensed to the profit and loss over the relevant vesting period."

Someone can correct me if I'm wrong, I think the above means the share-based payments aren't valued using black-scholes value at the time of issue, but rather their value when converted?

If I'm right, then are you suggesting BoD shouldn't be incentivised by shares? Because I'm assuming you must understand that when your shareholdings multi-bagged, so did the BoDs. Would have you been happier if the SP hadn't multi-bagged, and the BoDs options expired out-of-the-money?

To put it another way, under the current remuneration proposal, JM will be issued 1.715M at 143% of the 5 day VWAP SP prior AGM. The black-scholes valuation for that is ~$30K.

Its the current value at the time of issue that counts. So at the time of issue, if the AGM agrees, JM will get ~$30K worth of shares. That's not a huge amount for a C-level exec. I know people who got $20K bonuses, who weren't anywhere near C-level. Now, lets say the SP skyrockets, and in 3 years its worth $1 (wishful thinking, but anyway). Well then, he'll have a $1.715M "payment". If you don't like that, then perhaps ADN should pay JM $30K in cash instead, and raise that along with the other staff incentive schemes via a discounted CR. It'll result in more dilution than would otherwise be achieved by paying them directly. But at least people won't complain the BoD has benefited when the SP multi-bags.