Originally posted by Spider75
Hi Staltock,
“How can ECT shareholders help add value to the company?
What actions and behaviors from shareholders will make us appealing to future investors?”
- Require senior executives to bear the risks of ownership just as shareholders do.
To better align these interests, many companies have adopted stock ownership guidelines for senior management. Minimum ownership is usually expressed as a multiple of base salary, which is then converted to a specified number of shares. For example, eBay’s guidelines require the CEO to own stock in the company equivalent to five times annual base salary. For other executives, the corresponding number is three times salary. Top managers are further required to retain a percentage of shares resulting from the exercise of stock options until they amass the stipulated number of shares.
Definition: Shareholder value is the value enjoyed by a shareholder by possessing shares of a company. ... Description: Increasing the shareholder value is of prime importance for the management of a company. So the management must have the interests of shareholders in mind while making decisions.
2.Reward CEOs and other senior executives for delivering superior long-term returns and build their success on a performance-based culture,
“The Board has a policy of ensuring that remuneration paid to Directors and management is market competitive while at the same time aligned to the achievement of strategic objectives and the creation of value for Shareholders. “
Regards
Spider, your insight is valued... I was unaware of these concepts in the industry and it is certainly something with merit for consideration. There are certainly many examples of linking performance with remuneration out there with varying degrees of success.
Any thoughts from yourself or others on how practical this would be for small cap stocks that might require a larger management team?
- As an example, a company with plenty of potential that has not yet been realized has a market cap of $30 million and may have an organization structure that has a CEO and number of execs with combined salaries that may require them to own a combined 10-15% of company... I can certainly see the importance of the link, but the risk involved with a company may be prohibitive for some management
- Obviously the above would have some consider to drop the wages of management, however this can only evidently only go down to certain levels as well (technically minimum wage), but then retention becomes a challenge
I have tabulated suggestions so far and updated the feedback to date, which is below. I am trying my best to flush out the crux of what people are saying, and encourage contributions that assist in doing so (e.g. many have provided numbering for each suggestion being proposed, and then provided examples to support this). In the spirit of HC guidelines, I hope my summary of each suggestion is viewed as balanced, and of course welcome any corrections to misinterpretations, or how to improve the presentation.
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Column 1 |
Column 2 |
| 0 |
Contributor |
Thoughts/Suggestions/initiatives |
| 1 |
SP3
|
|
| 2 |
a) Talk to brokers
|
|
| 3 |
b) Don't reply to threads trashing company and BOD |
|
| 4 |
c) Capitalize on threads being being read by whole new audience |
|
| 5 |
d) Add value as a company - might even benefit Hot Copper (HOT) |
|
| 6 |
HC Trader
|
a) Stop replying to trolls |
| 7 |
b) Already Sent emails to Hancock Prospecting, Motley Fool, The Age and Sydney Morning Herald among others |
|
| 8 |
arion |
a) Stop chasing the small gains b) Voting system on trolls |
| 9 |
Prosperman |
a) Hold management to account |
| 10 |
Unknown |
a) opportune company image marketing |
| 11 |
Risk Reward |
a) Encourage those who stopped contributing in the past, to return |
| 12 |
Spider75 |
a) Require senior executives to bear the risks of ownership just as shareholders do b) Reward CEOs and other senior executives for delivering superior long-term returns and build their success on a performance-based culture |
(20min delay)