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Morning
Not sure if my understanding of yesterday’s RNS is correct so I am checking with the experts on this BB. My understanding is that the directors have been awarded options which gives them the right to buy newly issued shares at 1.3p sometime between now and June 21. Therefore if share price hits 3p during this period they could exercise the option by purchasing the shares and then sell them in the market for 3p and make 1.7p profit per share. If price does not hit at least 1.3p by Jun 21 then shares would expire worthless and poor directors would not receive a bean.
Also why are 2 amounts mentioned on each dealing form except the form for Ferguson which indicates the number of options (12m) and the number of free shares (7.5m) which is his bonus for all the hard work he has put in in achieving nothing. Not denying he may have worked hard but end of the day the market went against him end result is back to square one.
R
Cheers
Ricksan - yes you have correctly understood how options work in your first paragraph. As for why directors get free shares and options, one is essentially as an immediate payment and the other is as a bonus. The options always have a time limit on them so an ex-director cannot still have a claim on a big chunk of company equity whereas a current one will be able to renew them each time they run out.
For a good example of how a director runs options for their own benefit look at Stephen Sanderson the CEO of UKOG. He has never bought a single share in his own company yet he awards himself 25 million options each year as the previous 25 million run out so that if things go well he can never lost out. HTH
Sound example but SS has made just as much of a dog's dinner of UKOG as oeur bod have of Solo. Only interested in themselves.
Difference being solo have a huge CPR'd asset with high flow rates and the BOD own around 7% of the company through share purchases with their own money, SS has bought zilch at UKOG.
Roll on the 14th July!
The only money that the bod spend on purchasing shares is money they have taken from investors in the first place. This is money that so far they have failed to earn.
Peterashbeck. Thanks for taking trouble to reply. I’m trying to form an opinion as to whether the incentive awards are fair or not. Every one to their own opinion of course. I guess short term holders who are holding with average of 1p could accept a low strike price whereas long termers like me would think a higher strike price fairer.
I didn’t want to trawl through historical RNSs but does anyone know roughly what kind of renumeration Solo directors have been receiving previously?
Thanks R
Caddy...Fitzpatrick initially spent £600,000+ on shares at 3.5p.
Remuneration not renumeration.....
And all the directors bought many more at 2.25p OG.
@Ricksan. It depends on what you believe options are for? normally when I have received them before they are for either,
1.0 A reward for positive past performance (Not the case here, as shareholder value has only been eroded since they took over)
2.0 Incentive to drive performance. - If this is the case then a 1.3p option price is hardly a ringing endorsement of the BOD's confidence in their ability to deliver a decent return to shareholders and delivers little in the way of ambition or even confidence in the delivery of their strategy.
Thanks CP. Yes 1.3p does seem to suggest that BOD expectations are quite low, either that or they are just plain greedy and taking the p*ss out of shareholders. FWIW I would vote against such proposal on that basis.
From a quick look page 16 of the annual report http://www.solooil.co.uk/~/media/Files/S/Solo-Oil/reports-and-presentations/2019/solo-oil-2018-annual-report-final.pdf it would appear that Ritson used to get £171k, Strang £57k and Maling £240k.
The new guys are a littl emore difficult to work out as they have not served a full term but Fitzpatrick pro-ratas out to about £220k and Ferguson about £45k, though I would be surprised if this does not go up.
The salaries are not unreasonable compared to their small cap peers to be honest.
The wages seem perfectly
Sorry - should have read:
From a quick look page 16 of the annual report http://www.solooil.co.uk/~/media/Files/S/Solo-Oil/reports-and-presentations/2019/solo-oil-2018-annual-report-final.pdf it would appear that Ritson used to get £171k, Strang £57k and Maling £240k.
The new guys are a littl emore difficult to work out as they have not served a full term but Fitzpatrick pro-ratas out to about £220k and Ferguson about £45k, though I would be surprised if this does not go up.
The salaries are not unreasonable compared to their small cap peers to be honest.
The options are also being granted in lieu of salary which seems more than fair IMO.
Thanks PeterAB, I’ll take a look later. So for Fitzy to realise around £220k SP would need to hit 3p?