In all the years of investing I'm still baffled at how publicly listed companies allow the kind of giving to some at the top of the food chain. What sort of a racket is it when the very shareholders supporting a company with cr's etc, continually see a large part of funds simply given to directors in terms of shares based performance or any other incentive favoring them and yet the very givers have their share value in negative territory.
It is also hardly fair to offer incentives simply based on a structured increase of share price from a low base. Increasing a near zero sp to double value may not be that hard thus hardly justifies all bonuses offered.
Most places have a salary or wage based system that is fixed - irrespective of how much or how little a company makes. If a company does well the rewards are your salary and/or wages and perhaps by a generous boss distributing a bonus to all concerned perhaps at year end and of course, keeping your job. In the event of poor company earnings, someone loses their job and if at company level massive losses ensue, the place may just simply permanently shut.
All directors are handsomely remunerated in the first instance - there should be no additional bonuses of any kind - except to say they have the same rights to buy shares in the company from the money they earn - incentive for them to earn their keep and let all prosper.
The skewed level playing field may never be level but a little more so and the term 'shareholder value' may actually have a bit more truth to it.
What a racket - the kind of racket that tennis players would sure have a winning shot with.
BNL Price at posting:
4.4¢ Sentiment: Hold Disclosure: Held
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