Is PuriflOH still being frugal? The group's 2019 outlay on directors fees has blown out.
PO3's 2019 Remuneration Report reveals Board fees totalling ~$259,000. This represents a 110% lift on the 2018 payout of ~$123,000.
There are two main reasons for the rise:
1. Size of increases in fees paid Melbourne directors including Steve Morris and Simon Lill;
2. Addition of two directors, Lucia Cade and Bill Parfet.
While the fee blowout may concern some holders, the total outlay remains relatively modest.
As PO3's Annual Report notes, the group's share price has risen 10-fold in 12 months. Four directors with "skin" have benefitted handsomely. The fifth director, Lucia Cade, has hitherto chosen not to own PO3 shares.
Right now, many CEOs in the med-tech sector are being paid a multiple of what PO3 is paying its full board.
Let's drill down a little deeper. I've computed how much PO3 is paying each director each day. We can ask a question. Are we getting value here?
Annual Fee 2019 Daily equivalent Change cf 2018
Simon Lill $72,000 $197 49.2%
Steve Morris $60,000 $164 82.7%
Bill Parfet* $31,467 $134 NA
Steve Annear $48,000 $131 18.0%
Lucia Cade $48,000 $131 31.0%
* Appointed Nov 7, 2018
More questions:
. Why is Simon Lill the highest paid board member? Lill's duties include those of Company Secretary.
. Why has Steve Morris's fee climbed 82%. Perhaps Chairman Morris can explain at the AGM.
. Why is Detroit-based ED Steve Annear being paid only $48,000? Maybe it's a modest top-up to the stipend he's receiving as the key VP at PO3 partner Somnio Global.
. Why is billionaire PO3 "company maker" Bill Parfet getting just $131 a day? That's another question for the AGM but I doubt whether Mr Parfet will be physically there to answer it.
Right now, PuriflOH's remuneration system does not include performance incentives.
I would have thought that Bill Parfet would appreciate the need to set targets and reward performance.
If so, the PO3 remuneration protocol could be set for reform. PO3 may introduce STIP/Short Term Incentive Performance measures and/or LTIP/Long Term Incentive Performance measures.
One option would be to offer incentive rights for the delivery of shares on payment of an exercise price.
If PuriflOH decides to upgrade its remuneration system it's likely to seek shareholder ratification - almost certain given that PO3's chief shareholders are Carl Le Sour's Dilato Holdings and Bill Parfet's Upjohn Laboratories.
PO3 may flag important changes in its Notice of Annual Meeting due to be posted in the last week of October.
(20min delay)