Remuneration Report - Yeah or Nay ?

Its annual general meeting time and the first resolution to be voted on is to approve the remuneration report.

Regarding Resolution 1 - Adoption of the Remuneration Report

To consider and if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution.

"That, for thepurposes of section 250R(2) of the Corporations Act and for all other purposes,the Remuneration Report be adopted".

The Remuneration Report can be found within the Directors Report of the Annual Report from pages 15 - 22. The above resolution if voted on would adopt the Remuneration Report in its entirety.

This year and for the previous four years back until 2015 there has been a section in the remuneration report within the directors' report headed Relationship between theremuneration policy and the company performance.

That section is required to be in the remuneration report as per section 300A of the Corporations Act 2001. It is supposed to contain "(b) discussion of the relationship between such (remuneration)policy and the company's performance; "

For five years (since 2015) successive Cynata reports have said the same thing.

"The boardconsiders that at this time,evaluation of the Group's financial performance using generally acceptedmeasures such as profitability, total shareholder return or per companycomparison are not relevant as the Group

is at an early stage in theimplementation of a corporate strategy that includes the development of a novellife sciences (i.e. therapeutic stem cell) manufacturing technology and the identification andexecution of business opportunitiesas outlined in the directors' report"

For about three years I've not been happy to read that because it reads more like a disclaimer of what doesn't apply and of what isn't relevant rather than a positive statement that discusses the actual relationship between remuneration policy and company performance.

If evaluation against profitability doesn't apply, if evaluation against total shareholder value doesn't apply and if comparisons with other companies are considered relevant - what criteria does apply and what would the board have shareholders consider to be the relevant correlates between remuneration policy and company performance?

Cynata is not in the same place as it was five years ago. We completed one phase 1 trial now and are supposed to be considering three phase 2 trials in the coming year. I think by now we should be able to read some positive statements in the remuneration report whereby the board of directors can asset some things that do apply and that are relevant to the relationship between the remuneration policy and the company's performance.

I think I'm going to vote no to the remuneration report because I can't endorse a simple disclaimer statement sitting in the spot where a positive discussion is supposed to be.

By voting no I'm hoping to say to the board - things look incomplete or are being poorly communicated to shareholders in this remuneration report about the relationship between individual performance of key management personnel and overall company performance and so I want to see something better in the next remuneration report.

I want to see a relationship positively discussed in next years report not just disclaimed.

Elsewhere in this years remuneration report is the statement (page 16) "Overall remuneration policies are subject to the discretion of the board and can be changed to reflect competitive and business conditions where it is in the interests of the the Company and shareholders to do so".

The extent of discretion of the board seems to be currently effectively infinite. There have been bonus payments made over the years - which might have been made with good reason - but the rational for making them should be able to be shown better if that is the case.

At the start of this year it seemed possible that the Fujifilm option might have been exercised on time and that we might have had three phase 2 trials closer to being started than we currently have. There can be reasons for delays. Sometimes management have to do things (attend to low--ball take overs) which can be distracting but have to be done.

A lot of discretion is asked of shareholders by management when they ask for an additional 10% placement faciltity (to give them effectively a 25% capacity to dilute) and to also ask for an Employee Option Acquisition Plan which can contain cashless exercise facilities for options that could be assigned in future at the discretion of management.

Against all the asked for trust I don't think it is too much to ask for a better explanation of the relationship between remuneration policy and company performance.