Director Buys16 Mar 2020 10:11
Initial Email: Hello Team LK, as a long term shareholder in this business I am keen to understand when the directors of our company will buy in personally rather than receive them as part of their compensation package. I appreciate its an open question that only the director themselves can answer. So, let me put it to Leo / Gordon / Antony / Stewart directly, will you use your own money to buy in when the market allows?Initial Response:As you will be aware, one of the main benefits of the directors receiving 50% of their salary in shares is cash preservation. The other benefit being alignment with shareholders. Cash preservation is still very important for us given the volatility of the capital markets – we need to be able to live within our means. The choice the Directors have is either: (a) to receive 50% of their fees in shares (effectively keeping money in the Company); or (b) paying those 50% fees in cash and then the Director buying shares in the secondary market. The later option means the Company has less cash, the recipient of the money is the seller in the secondary market (not the Company). One benefit of the later option is that it is likely to boost the share price (additional buyers in the market). At present, the Directors prefer option (a) but we still remain open to moving to options (b) and buying shares in the open market. A decision on this is likely to be made in Q2 2020.Second Email: Many thanks for your reply but that wasnt the question I was asking. I agree with the whole 'aligned with shareholders' concept, I wanted to know if they would use their own money to purchase shares on the open market once they are out of a closed period and in addition to their share / salary replacement scheme. LK has already indicated he would / will, I would like to know the thoughts of the other directors individually.Second reply: Further to your question, Mr Stein and Mr Douglas have previously purchased shares outside of the Share Salary Scheme. Whether they do so in the future is at their discretion. Mr Hawkins would expect to purchase shares in the open market once the Company is out of a closed period. So, we are in a closed period and the indications are they will buy. Interesting info, but somewhat overshadowed by the current world events. Batten down the hatches for a while... the world is still spinning, the sun gets up every morning and we have viruses that infect the globe. Nothing too new I'm afraid... the reaction however is.
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