PEN is owned by its shareholders, just like any other public company. The ideology of democracy tells us that every year we have an opportunity at the AGM to either support or oppose the proposals that will carry us through the next calendar year. This is a time where the democratic system provides opportunity to let the voice of shareholders be heard in such a way that it can shape the outcomes in the year ahead.
The reality however is that the vote held by retail investors (like most of us) typically has little to no impact in these matters. The top end of the share register is chock full of institutional investors holding significant and influential positions by virtue of large shareholdings. These shareholders thus control the outcomes of voting and get their own agendas established as priority.
This creates shareholder apathy and retail investors either abstain from voting or assign proxy votes to the chair - the controlling forces at play retain the opportunity to do as they see fit. Where that agenda serves the ends of all shareholders it is appreciated and commendable, and builds support and loyalty. However, where that is seen to serve a select few opportunistically it raises questions about ethics and integrity.
In relation to performance incentives, I personally believe they are a good thing in principle. Rewarding employees on the basis of established measures is appropriate.
The lack of share price performance this past year is partly due to unavoidable market circumstances, there is little doubt this is true. However, to propose that the current share price is wholly the result of uncontrollable events is fictitious, if not misleading.
I would propose the present state of affairs is also the result of some poor decisions taken by the management which they should now be taking responsibility for.
The management should now take responsibility for choosing not to pursue the Wyoming Industrial Development Bonds, which would have delivered the sum of $70 million dollars from a coffer holding more than $600 million earmarked for Wyoming State industry support. Furthermore the refusal to answer questions relating was a frustration. Certain shareholders were left with no choice but to approach the Wyoming IDB directly to determine the status of the application, as opposed to being informed of this decision by management.
I speculate that the greed within the ranks of large institutional shareholders shut this option down due to the associated lien associated with the Wyoming IDB, with the resulting encumberance on their control of PEN. Unscrupulous behaviour from PALA and the selling off of large no’s of shares to block the post SML rally, for reasons still unknown, unreported by management, and unacceptable from a so-called supporter and cornerstone investor to PEN. Did we witness blatant manipulation here.
I propose that PEN would have made it to production by now had this funding route been pursued, and the PEN share price could just as easily have been $0.08+ at the time it needed to be to see the Class D performance rights vest. We would not now have the debt to Blackrock, nor the dilution associated with their rescue of PEN. I suggest the Class D’s would have enjoyed unanimous support had that been the case.
I propose that management despite knowing it to be untrue, continued to perpetuate a fictitious timeline to production, maintaining this position up to only a few weeks ago. Truly unbelievable, and in the face of all the other evidence we have available a truly poor reflection on them.
I propose that management failed in securing future off-take agreements that would now make it so much easier to get to production. I have to question whether internally there was always doubt that delivery timelines could ever be met, and in such case all the more outrageous that these timelines were continuously proposed in presentation media.
I would suggest that it is a combination of both uncontrollable events AND decisions made by the management that are a key factor in PEN now still languishing at sub 3c.
I would put it to the members who have Class D performance shares that the milestones listed in items (a) – (h) under 9.2 of the AGM announcement are what you collectively were paid around $2.1 million dollars in salary benefits by us the shareholders, with our money, in the past year to deliver upon. This is not an outcome which merits a performance incentive, this is your job!
Considering PEN doesn’t yet earn a bean in revenue, I would propose that the salary remuneration received this past year is extremely generous. There would be very few executives in ASX listed loss making ventures such as PEN who receive such an award. PEN managers enjoy this privilege largely due to the potential within the company and when that is realised in monetary terms, where we all derive associated benefit, then the additional performance rights will be earned.
To the shareholders:
Due to the conflict of interest, those holding Class D performance rights cannot vote for Resolution 8. Therefore, if we assume that all the institutional investors support Resolution 8 (and I can’t be sure they do), then there is no more than 40% of the share register who would vote in favour of this resolution at this point in time.
Therefore another 10% of our votes would be needed for this resolution to carry.
Resolution 8 is an ordinary resolution, so a simple 50% majority needed only.
You need to vote! This is one of the few opportunities your voice will certainly be heard at the AGM.
I will be voting NO to Resolution 8.
I have great hopes for PEN going forward, but management have simply been doing their jobs to date, and at times with some reservations about the choices being made and outcomes arising.
As a shareholder I won’t support gratuitous handouts; circa $1M in the case of Gus' Class D entitlement.
When my considerable investment in PEN starts delivering then you the management will get my support for the bonuses.
Until such time you're on notice to deliver the results we elect you to the office you now hold to execute on that.
PEN Price at posting:
2.3¢ Sentiment: Buy Disclosure: Held
(20min delay)