why do zero strike price options matter?

This thread has three major constituencies:

1. People who think that the zero strike price options STINK and represent dreadful corporate governance that should be campaigned against at every opportunity.

2. People who think that the options deal is less than perfect but are not too concerned as the oppies are just a diversion from the bigger game of getting the product to market.

3. People who think that the options are, more or less, a fair reward to the 29 year old Rogers for taking on the PRR challenge etc.

I don't have any rocket science to add here, except to urge anyone in categories 2 & 3 above to consider what the free, zero strike price options do to the motivations of the recipients.

In short - for most people - including most 29 yo company directors - even $1 million is a lot of money.

Therefore, once the options structure is in place the temptation will be to say "let's not bother with the years of hard work to actually commercialise the ovarian cancer vaccine. Let's just try and generate some newsflow asap, get a bit of excitement into the stock and GET OUT."

Shareholders won't be any the wiser until the App 3Y is lodged a few days after the sale transactions have gone through.

I am not having a go at ROgers & Co in saying that he may be tempted to go down this path. I am not saying that he is a bad person if he goes down this path. 99% of directors who have the ability to take a quick profit in similar circumstances would do so.

The big issue is that Rogers financial motivatiosn look set to cease to be well aligned with Mum & Dad shareholders as soon as he has the opportunity to make $1 - 2 million from selling the free shares at prices that would see recent entrants into the stock LOSE MONEY.

If you can't see the risks in letting this situation unfold, then you are being wilfully blind.