xTV Performance Rights
I think its very useful to look at the performance milestones that management have set for themselves and what rewards they will receive once they are met. Logically, management should set targets they they feel can be comfortably achieved in the time permitted, yet not so easy that it appears to be a giveaway. The targets once achieved should be beneficial to management and shareholders alike.
So, here are the performance rights and milestones set out in the company prospectus :
Who is getting these shares and how much will they be worth?
From the appendix 3X, we can see the following to be awarded to three of the board members:
Joseph Ward
32,027,362 Performance rights Tranche 1
48,041,042 Performance rights Tranche 2
32,027,362 Performance rights Tranche 3
48,041,042 Performance rights Tranche 4
160,136,808 TOTAL Estimated* value (early 2017; 7.5c) : 12.0 million (equiv. 41 years salary) Salary+directors fees : $290,000
Thomas Reynolds
3,683,863 Performance rights Tranche 1
5,525,795 Performance rights Tranche 2
3,683,863 Performance rights Tranche 3
5,525,795 Performance rights Tranche 4
18,419,316 TOTAL Estimated* value (early 2017; 7.5c) : $1.38 million (equiv. 5.3 years salary) Salary+directors fees : $260,000
+ 29 million options
Mark Canepa
4,288,775 Performance rights Tranche 1
6,433,162 Performance rights Tranche 2
4,288,775 Performance rights Tranche 3
6,433,162 Performance rights Tranche 4
21,443,874 TOTAL Estimated* value (early 2017; 7.5c) : $1.61 million (equiv. 14.4 years salary) Salary+directors fees : $112,000
+ 17 million options
* estimated value is based simply on assuming that all 4 milestones are achieved and therefore the share prices will have reached at least 7.5 cents with some stability, but likely higher given the 1 mil/month gross revenue attached to milestone 2.
My point of showing all this is to demonstrate that the directors have a very large reward at stake with these performance shares - many times the salary that they are earning. I feel confident that these targets were set realistically and am therefore reasonably confident that they will be met. The base level outcome of this is a share price of 7.5 cent within about 1.5 years. I'd be very happy with that. But considering milestone 2, we could see a much higher share price than even that (e.g. 12 mil gross; 6 mil NPAT might give a price near 15 cents).
XTV Price at posting:
1.8¢ Sentiment: Buy Disclosure: Held
(20min delay)