Banter and General Comments .. BRK, page-11944

There's nothing wrong within incentivising management to perform. But the crux is those incentives need to be linked to shareholder reward, and the only tangible reward is cold hard cash either by way of a return of capital &/or an increase in the share price. That's the only reason we're here....to make money. My beef with management is that they get their carrots irrespective in large part whether shareholders get rewarded for risking their capital; they get those rewards way ahead of shareholders along the development journey if you will. We don't. That's wrong I think. So far there's been a disconnect with management/staff options and shareholder return.

Look at the essentially non recourse loan given to the MD with a face value of $1million (the idea of which I have no issue with if structured fairly) for example .....it needed to have an expiry date to encourage the MD to move the share price by the expiry date to monetize it....to give it value & in turn for the shareholders to share in that value through a higher share price. A terminal date engenders a sense of urgency to monetize it but it's open ended.....where's the value of time.... indeed the incentive to move the share price now, not in 3-4 years time? If that loan was predicated on a measure of return for shareholders limited by a fixed expiry date believe me there would be incentive to see the share price higher by that date otherwise it's gone. But it's not, that loan is effectively in perpetuity. Again, I'm all for incentivising management but it's got to be on terms where shareholders get rewarded simultaneously, not on the promise of the possibility of it occurring years later. For shareholders it's 'heads you win, tails you lose'. For management it's 'heads you win, tails you win less'. That is not a fair alignment of interests and it's why I was vocal in voting down the options as they were presented.