1. This is a 3 year term incentive plan, and the payment to Simon is AUD 350,000 in today's share price comes to 710,000 shares. Therefore, if Simon receives the full compensation in 3 years time, we are paying him full 710,000 shares by 2027, plus CFO and COO's package which are not mentioned in the resolutions. If the company consistently performs above +15% EPS grown from 30th June 2024 for 3 years (1.15^3), we expect our EPS to be around 0.076 per share by 30th June 2027.
2. For TSR, the calculation is trickier and this is something to do with the market movement as well. Again, if the 75+ percentile top performing companies are going perfrom +20% share price increase per year for the next 3 years. Our 3 year share price will be at least (1.2^3) * 0.5 = 0.86 per share by 30th June 2027 to trigger 100% payment Class B performance rights to Simon. (I personally think this will definitely happen)
Let's say the fair value of DGL is AUD 1.2 per share, we are paying Simon AUD 1.2 x 710,000 shares = AUD 852,000 for the coming 3 years work. However, this incentive package is likely to be recurring for 2025 and so on, number of shares may reduce if the share price goes up.
TSR incentive criticises Simon is taking advantange of the current share price and harms shareholders' value. For EPS incentives, we all expect NPAT to improve and likely Simon is also going to meet the targets.
CFO and COO are kept in this 3 year incentive plan.
Please share thoughts. Thank you.
DGL Price at posting:
50.0¢ Sentiment: Buy Disclosure: Held
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