annual report -options -director remuneration

The thing that interested me from the annual report was the number of options.

Approximately 900 million shares currently under option (listed and unlisted), which means approximately 40% of the company's equity is in options.

Warren Buffett says he would never invest in a company that has more than 7% of their equity as potentially dilutive options.

So I guess we will not see good old Warren coming near VOR any time soon. I wonder how many national and international financiers and investment firms adopt the same principle.

The other thing that was interesting is the price of the Director's new options, compared to the old options.

The old options were set at 15 cents and 30 cents, so they can kiss them goodbye (most probably, but I hope not, because I would love to see VOR at 35 cents).

The new options are set at 3 cents.

The other interesting item is the remuneration of Directors for the past financial year.

See the charts on page 7 of the 2012 annual report.

The Base Salary + the Share/Option based payments were as follows.

Wood $967,000 (2011 - $97,000) Increase of 897%
Lindsay $466,000 (2011 - $30,000) Increase of 1,453%
Tumur $820,000 (2011 - $178,000) Increase of 361%
Flavel $993,000 (2011 - $84,000) Increase of 1,182%
Nielsen $809,000 (2011 - $206,000) Increase of 293%

Not bad "potential" remuneration for a company that's share price came down from a peak of 10 cents to 2 cents (a decline of 80%). These directors must think they are bankers, someone tell them they are not working for Westpac (ha ha).

To be fair, a lot of the Share/Option based payments include the 15 cent and 30 cent options, so they will probably never get exercised, which would decrease the Director's overall remuneration quite substantially.

I suppose the other way you can look at it, is that the directors are prepared to substantially support the company by exercising significant option payments, should the share price be amenable.

Just the same, someone please tell me that I have read these figures all wrong, and that I am incorrect in my interpretations, or that there is a good reason for the way they are - please!!

Gw

Do you think the path to wealth is always pure and honourable?
(George R.R. Martin - Game of Thrones)