question, page-4

Hi Kse3137

could you please provide the link to those details?

From my understanding Management Incentive options are not counted as Ordinary shares so as for

Resolution 3

Authorise a consolidation of the Company’s ordinary shares on 1 for 5 basis, so that each shareholder
becomes the holder of 1 Molopo ordinary share for every 5 shares currently held

These options held by management will not be consolidated as they are not Ordinary shares.

The reason i bring this issue up is for this article just published in the "Academy of Management Journal" some uncanny resemblence to MPO imo

Corporate America's CEO Stock Option Scam

Academy of Management Journal

October 22, 2007

The same stock options that are making top executives fabulously rich, says a landmark new study of nearly 1,000 U.S. corporations, are putting companies at risk for mega meltdowns.

Stock options now typically make up, on average, around half the pay that goes to America’s big-time corporate executives.

In real corporate life, report Donald Hambrick from Penn State and W. Gerard Sanders from Brigham Young, a company that lavishes options on top execs is essentially creating incentives for risky decisions highly likely to backfire.

“It's fair to say from our data,” Sanders told Reuters last week, “that going very heavy with options is likely to have a negative effect on the health of the company.”

Stock options give executives the right to buy shares of stock at some point in the future at the share price when they're granted. These options can be incredibly lucrative. They can — and have — made billionaires out of CEOs who see their share prices soar.

And that’s why corporate boards say they grant options. Stock options, they contend, give executives the incentive to work tirelessly to get share prices higher — and keep shareholders happy.

The logic seems impeccable. A stock option grant certainly does create plenty of incentive. An executive granted options to buy a million shares at $10 each can score a $10 million personal profit if his company’s share price bounces up from $10 to $20.

The exec merely buys the million shares at the preset $10 option price, then turns around and immediately unloads them at the $20 market price.And if that market price has jumped above $20, the executive’s windfall would, of course, be even higher.

But what if the share price, between the original grant of the options and the moment the executive moves to cash them out, actually drops?

That question goes to the heart of Corporate America’s option problem, conclude Hambrick and Sanders in their new paper, Swinging for the Fences:

The Effects of CEO Stock Options on Company Risk-Taking and Performance. For executives, they note, stock options have no “downside.” If a company’s share price sinks, option-heavy executives haven’t lost anything, because they never had any cash of their own on the line.

Executives in that no-lose position, Hambrick and Sanders point out, will naturally gravitate toward “projects with the biggest possible upside” and pay scant attention to “the size or probabilities of downside outcomes” these projects might generate.

The chance at winning the option jackpot, in short, will leave these executives “inattuned to early signs of project failure and generally careless about risk mitigation.”

Given that dynamic, Hambrick and Sanders postulate, we can “expect that option-loaded CEOs have a relatively high likelihood of delivering big losses” — and that’s exactly what the data from their landmark analysis of 950 American corporations show to be the case.

Companies where options make up half or more of CEO pay end up over four times more likely to suffer “extreme shareholder losses” than companies where options constitute 20 percent or less.

Corporate boards, Hambrick and Sanders speculate, might be better off if they substituted grants of “restricted stock” for stock options. Executives who get restricted stock are getting actual shares, not the option to buy shares in the future. But the shares carry a restriction. They usually don’t become an executive’s property until a certain time period has passed.

But restricted stock, notes Bloomberg executive pay analyst Graef Crystal, hardly makes for an effective cure for stock option pay ills. A CEO granted a million shares of restricted stock when those shares are selling at $10 each will still be able to walk away with a $5 million personal profit if the shares have dropped down to $5 when the CEO becomes legally able to sell them.

The “thought that a CEO could nonetheless earn millions for negative shareholder returns,” says Crystal, “is troubling to say the least.”

So what’s the best CEO pay solution? How about simply deep-sixing the notion that CEOs need huge pay incentives of any sort.