BOD Salaries21 Dec 2024 19:39
All
As the New Year approaches I believe it is time to face the real reality of the small cap mining space which, quite frankly, is nothing short of atrocious. I have been through decades of market cycles, been invested during the times of major Stock Market crashes, never seen conditions so poor for so long in this sector, usually after a turbulent period you would expect to see share price recovery after 18/24 months, the junior mining sector will be approaching 4 years of downside by end Q1 2025.
I follow many junior companies and read their reports, in particular BOD salaries and G&A costs. It is hardly surprising to inform readers that nearly all juniors have cut their cloth significantly over the last 3 years, in particular executive pay. There are a number of companies where Directors are not taking salary at all or deferring it, others have cut their cloth to the bare bones, one junior (PALM) of similar scale to ORR, pay their entire BOD only £141k as an example.
We all have our views on the Lanstead deal however what some may not realise is circa 65% of the cash received will go directly into the pockets of ORR directors, over the last few years ORR BOD salaries are ranging around £400k per annum, you then have to add a further £350k pa for G&A, under current market conditions I consider that to be excessive, a CEO on £150k, a CFO on £120k one director on nearly £100k and then two Non Execs circa £30k, it's all very cosy.
Now some may say that these individuals took shares in lieu, however, I put it to readers that happened purely as a result of the cash not being there, as soon as the Lanstead parachute came into being it was back onto full cash payment PDQ there have been no reductions in pay.
Why are ORR salary levels far higher than many peers, I am not making this up, simply look at juniors with no revenue and you will find the vast majority pay 30%40%/50% less. To answer my own question I believe it is a legacy matter going back to the times when the now departed old BOD of Stratex were making discoveries quickly and selling projects to mid caps, at one point there was a £30m cash balance.
I believe the matter of salaries need to be addressed, my view is why do ORR need a full time CFO, after all there is no revenue and this position could easily be outsourced to a third party, we have no real need for a paid geologist on circa £100k either, my view is ORR are not cutting their cloth as others have done and us shareholders will pay for it soon enough unless they can monetise projects.
Thoughts !
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