Ann: LaserBond Expands to Queensland, page-13

This one has been on my watchlist for a while, and the recent acquisition prompted a little more reading of reports. The recent acquisition, on numbers alone, certainly raise its valuation in my opinion. However, I'd want a little more clarity on a couple of things:

Corporate Governance/Board size

Although in principle a lean board is a good one (given small companies tend to have a high proportion of costs tied up with board fees), some may wish to consider if further confidence in the governance of the company might be provided by adding one or more independent directors.

LBL currently has only 3 directors:

• Wayne Hooper Chief Executive Officer
• Matthew Twist Chief Financial Officer/Company secretary
• Philip Suriano Chair / Non-Executive Director (NED)

Only the Chair could be considered independent (but note his share holdings have increased significantly, to a large extent through payment in non-cash consideration for services as NED)

The shares payment for NED/Chair increased considerably in 2021 (approved at most recent AGM)

I note that value of shares payments has significantly increased in relation to FY2021:
2019 50,000 (@ 39c, $19500, + $30k cash)
2020 50,000 (@ 39.5c, $19,750 +$30k cash)
2021 40,000 (@ 94.5c, $37,800 + $30k cash)
ASX Corporate Governance Council guidelines recommend that "... non-executive directors should not receive performance-based remuneration...". However, I note a key change in wording in the annual reports occurred in FY20 and FY21 now suggest that shares to be paid to Suriano are linked to company performance:
"The board has not agreed to the volume of shares to be issued to Phillip Suriano based on FY21 [or FY20] company performance at the time of lodgement of this report"
If these are performance-based or linked, then performance hurdles and criteria MUST be detailed, as described in CORPORATIONS ACT 2001 - SECT 300A. There is no mention in the published AGM agenda or comments of why the NED remuneration increased significantly.
Similarly, the Company Secretary and CFO (Matthew Twist) who is also an executive director was ALSO was granted 40,000 shares as non-cash payment as an executive director. This was an AGM resolution, but with no explanation of the reason for this payment in Annual Report, or in published AGM agenda or commentary.

There are also some contradictory policies/statements on the remuneration committee (which did not meet in 2021, and met once each year only with one attendee according to annual reports 2018-2020).

This post is in no way suggesting that remuneration is not deserved, nor that there is any impropriety, but these features of the board and the disclosure of rationale for remuneration of directors struck me as worth asking by any current or future shareholders.

If anyone has insight, or additional comments made at the AGM, please feel free to post, and/or correct any factual errors I may have made