FYI I have not bothered to research earlier than the 2019 Annual...

FYI



I have not bothered to research earlier than the 2019 Annual Report, as most of these performance shares are basically applicable from this period

One must remember that there was a resolution passed allowing the passage of performance shares to be handed out to these relevant parties and was passed without much reservations from institutions that hold more than 50% of script in Starpharma

Remuneration favours and is heavily weighted to the recipients and certainly not the shareholders is an extreme understatement

Just to refresh readers regarding these performance initiatives and how they take into account executives and shareholders as quoted in annual reports

Remuneration strategy linkages to group objectives, in order to align the interests of executives with shareholders

Performance is assessed against a suite of measures relevant to the success of the group and generating growth and returns for shareholders

Short Term Incentives (less than 3 years) purpose is to reward executives for their contribution to achievement of business outcomes.

Long Term Incentives (3 years or more) purpose is to reward executives for their contribution to the creation of shareholder value over the longer term,

You will notice the remuneration report for the last 4 years is around 23 pages in length (again normal)

Who actually reads them (I do every year)

When you have 4 board members on the remuneration committee (it is not unique to Starpharma), it seems to me an inordinate amount of time is spent working out how to reward the employees in a fair way.

One wonders why there is not a committee dedicated to monetising our 3 products and strategies needed to expedite this.







Financial year ordinary shares
Below are 4 years figures showing share ownership for Nigel Baade stemming from 2019 - 2022 inclusive


Balance at the start of the year
(2019) 525,291 (2020) 600,291 (2021) 494,079 (2022) 354,300 – – –

Granted during the year as compensation
(2019) 0 (2020) 0 (2021) 0 (2022) 0

On exercise of performance rights during the year
(2019) 75,000 (2020) 0 (2021) 0 (2022) 0

Other change during the year
(2019) 0 (2020) *(106.212) (2021) *(139,779) (2022) 0

Balance at the end of the year
(2019) 600,291 (2020) 494,079 (2021) 354,300 (2022) 354,300



* on market transaction
* Other changes relate to market transactions and purchases under the Share Purchase Plan undertaken in the year.



Performance rights
Below are 4 years figures showing performance rights for Nigel Baade stemming from 2019 - 2022 inclusive



Balance at the start of the year
(2019) 904,563 (2020) 993,492 (2021) 1,161,491 (2022) 1,420,939

Granted during the year as compensation
(2019) 193,000 (2020) 193,000 (2021) 300,335 (2022) 141,000

Exercised during the year
(2019) (75,000) (2020) 0 (2021) 0 (2022) 0

Other changes during the year
(2019) forfeiture (29,071) (2020) forfeiture (25,001) (2021) forfeiture (40,887) (2022) forfeiture (35,874)

Balance at the end of the year
(2019) 993,492 (2020) 1,161,491 (2021) 1,420,939 (2022) 1,526,065

Vested and exercisable at the end of the year
(2019) 324,492 (2020) 558,091 (2021) 883,039 (2022) 1,047,385

Total Unvested
(2019) 669,000 (2020) 603,400 (2021) 537,900 (2022) 478,680


You will notice the vested and exercisable shares for 2022 (1,047,385) + total unvested (478, 680) adds up to 1,526,065

Nigel Baade will receive 1,233,300

It seems to me he forfeited 292,765 shares by resigning. It does not make sense to me that he does not forfeit the whole 478,680 shares

What happens if an executive leaves?

If an employee ceases employment, all unvested rights lapse except for certain circumstances relating to a “good leaver”. The “good leaver” provisions allow the Board to determine the accelerated vesting of the rights if the employee ceases employment due to death, illness, permanent disability, redundancy or any other circumstance approved by the Board after considering the portion of the performance period that has elapsed and the extent to which performance conditions have been met.



Disclosure

I am not a financial advisor. The information above has been sources from annual reports. Any comments outside of this is my opinion only