Ann: Trading Halt, page-90

Whoa, that font size! How to I zoom-out the web page to make it a little less blinding while also being able to see what I type in my reply? (#rhetrocial)

I'm not a Corporate Law lawyer but, based on my experience, I would say this:

• I think you might be getting 'issuing' confused with 'vesting'.
• The vesting of existing Performance Rights (PRs) under these conditions is, from memory, driven by a 'change of control' event and is usually contemplated and articulated under the associated rules when the PRs were originally issued by a Board.
• SHs don't usually get an opportunity to specifically vote on LTI PRs that a Board might issue under to an existing employee incentive plan that has previously been approved by SHs. That's a delegated authority that the Board holds without needing further ratification by SHs. (NB: The POS Incentive Performance Rights and Options Plan was approved by SHs at the 2022 AGM).
• An exception to this is PRs issued to a Managing Director (because they are a Board member and also part of the executive team who might be receiving the PRs from time to time under the terms of the plan).
• PH, was the MD of POS when his PRs were issued. The PRs were specifically approved by SHs, via a dedicated resolution that was presented during previous AGMs.
• Given the SOA will amount to change of control event, vesting of the already-issued PRs that have not yet vested will occur automatically. No further SH approval is required.

[WARNING] Rant Inbound! Dive, Dive, Dive! (lol)

• For me, the issue is not about why the PRs will auto-vest under a change of control event. That ship has long-since sailed.
• It's about thinking further upstream. That is, thinking about how appropriate the KPI hurdles were that gave rise to issuing the LTI PRs and how many were deemed appropriate to issue in the first place. That's the gate.

• Basically, it boils down to understanding the confidence that we, as SHs, are placing in our Boards to make good decisions on our behalf (i.e. not just their own interests) when we vote on adopting things like Incentive Performance Rights and Options Plans. It's a perennial chestnut. You want good managers running the company who add real value and you want Board members that are aligned with SHs to make appropriate decisions around reward for effort for the execs they oversee.
• Time and time again we see Boards comprised of professional directors who have precious little in terms of meaningful alignment (shareholding) with the SHs they serve. All too often we see MDs and Boards, more generally, bang-on about being 'aligned', when they are not -- well not in any meaningful way.
• It's all part of the game, imo. And it's often 'gamed' to within an inch of its life down here at the penny end of the market.
• Overrated people (directors) making judgments that result in over-remunerating overrated executives for average, or even substandard, performance. So many times I have seen overly generous incentives provided for effectively simply turning up and doing their f-ing job.
• Many directors, CEOs, and remuneration specialists will argue that it's what the executive employment market demands -- a mix of base and at-risk reward comprising the overall remuneration package. It's not a difficult argument to understand, but it gets torpedoed when you see KPI hurdles that are set inappropriately low which effectively reward mediocrity, or worse, rather than true value-adding.
• Related Side Note: In mid-2022 the POS Board elected to defer assessment of the FY2021-22 KPIs by six months to Dec, 2022 (assessment was originally due end-June, 2022), alleging the exec team, including PH -- then CEO, now current Chair of POS -- had not met said KPIs due to "circumstances beyond their control" (I kid you not!). Needless to say, SHs responded with a Strike 1 during the Nov, 2022 AGM (<-- note the month). Come Dec, 2022 (i.e. one month after receiving the AGM Strike 1) the KPIs had now been achieved and the Board issued the rewards/bonuses. SHs didn't forget this and the Board received an overwhelming Strike 2 at the following AGM (Nov, 2023). However, it survived the ensuring Spill Motion because the hands-off cornerstone SH (a US holder) couldn't bring itself to follow through in holding the Board to account. How is any of this relevant to HRZ? Hallam, your recent Board appointee, was a director of POS during the period of the above anecdote.

Apologies for the length of this post. You asked a good question and I wanted to do it justice with a carefully considered reply.

Cheers,
Z