Looking further into the AGM notice, Resolution 3 is a massive slap in the face to share holders!!!
Basically the company is proposing to dish out a bonus to JF if the shareprice appreciates at a rate of 10% per annum above the healthcare index over the next 3 years.
"Half of the Resolution 3 Rights subject to Relative TSR will vest if the Company’s return is equal to the Index’s return. The non-executive Directors recognise that Shareholders in biotechnology companies expect a return in excess of the Index. To achieve the full Relative TSR performance condition, Starpharma’s Relative TSR must reach 10% per annum (or 30% over 3 years) above the Index, which is considered a realistic but stretching target."
Based off the 3 month avg SP leading up to June 22, the baseline SP is ~82cents.
Lets say that the biotech/healthcare index goes up by 10% per annum for the next 3 years.
That gives us a annual baseline of
Year 1 - $0.902 Year 2 - $0.992 Year 3 - $1.09
So for JF to get her bonuses the SP needs to be at the following targets by June of the next 3 years
Year 1 - $0.992 Year 2 - $1.09 Year 3 - $1.20
Are we happy with these targets? I know I am not!
Why would we award bonuses for gaining a SP in 3 YEARS TIME for a SP that is half of what it was nearly 2 years ago????
SPL Price at posting:
53.0¢ Sentiment: Hold Disclosure: Held
