damn options - a distraction from main game, page-11

The question has been raised whether or not the CEO will do well if they dont deliver.

Below is a simple table that IMO tells the story.

Column 1 is the hypothetical SP at Sept 2009

Column 2 is the CEO's total remuneration from salary and options.

Column 3 is the hypothetical return to shareholders from Friday morning when this gift was announced to Sept 2009 (some term this TSR).

Any executive of a micro-cap ASX listed biotech that can receive remuneration of say $1.0m whilst presiding over a 40% fall in a company's SP over 6 months (that's 80% annualised) has (a) a very weak board with poor governance or (b) his hand in the till at the expense of shareholders or (c) both.

IMO the options should be at the very least set at an exercise price of $0.075 and have a 24 month vesting period to ensure that he cannot take money off the table before he actually delivers what is currently being asserted to shareholders.

IS THIS NOT FAIR?

PS...he's already been rewarded with getting the SP to where it currently is with 18m 2c options.


$0.011 $360,000 -85%
$0.015 $440,000 -80%
$0.020 $540,000 -73%
$0.025 $640,000 -67%
$0.030 $740,000 -60%
$0.035 $840,000 -53%
$0.040 $940,000 -47%
$0.045 $1,040,000 -40%
$0.050 $1,140,000 -33%
$0.055 $1,240,000 -27%
$0.060 $1,340,000 -20%
$0.065 $1,440,000 -13%
$0.070 $1,540,000 -7%
$0.075 $1,640,000 0%
$0.080 $1,740,000 7%
$0.085 $1,840,000 13%
$0.090 $1,940,000 20%
$0.095 $2,040,000 27%
$0.100 $2,140,000 33%
$0.105 $2,240,000 40%
$0.110 $2,340,000 47%