Hi all, Executive Options are not a 'gift' at all. There's...

Hi all,

Executive Options are not a 'gift' at all. There's actually quite a lot of issues and pressures associated with them.

They are firstly assessable income = taxed at the marginal rate.

As a director (and executive management), you can exercise them but in reality, the ability to realise (sell) any shares is usually very restrictive with regard to infrequent and small selling/trading windows which must first be approved by the board. And most exploration boards that I've had experience with usually tie this into the realisation of a major project/event. So the corporate planets really have to align before one can actually realise this type of 'incentive'.

In addition, you cannot underestimate the scrutiny that major shareholders/instos place upon executives activities with their options/shares. I've had instos tell me when they'll "let me sell" my shares. It can be OK if you're an executive on the management team, flying below the radar, but not when you're a board member. The instos will only let you deal if they are all very happy (= blue moon event).

There's also that very awkward moment when the options are only slightly in-the-money and the market really spot-lights you to stump up a lot to exercise. Cath has to stump up $1.2m in the next few months...enough to upset even very strong household budgets!

So they are hardly 'free' in terms of $, fungibility, pressure and responsibility.

On another note....I'm very intrigued by what has not yet been discussed here in this thread. The 45m options being set aside for Executives other than Directors.

It is quite unusual for a non-board executive team to have nearly 2x the incentive set aside. It wouldn't surprise me if we saw GR end up with maybe 15-20m with Nicholls and Theissen sharing another 10m. This says to me they maybe setting aside 10-20m for new blood. Watch this space....they've got expansion plans, methinks..

Cheers,