Forum Archive Index - May 2003

["tennyson@caverock.net.nz" <tennyson@caverock.net.nz>]

Hi statkey,

>
> 
>I agree with your view of holding WRI for the present time.
>business scenarios are changing too quickly and by holding you
>are staying in the loop while receiving dividend.  It would be nice if
>WRI had a dividend reinvestment plan.
> 
> I would like to ask you a question . 
> 
>how do we stop the executives from diluting the shareholders
> equity by their insidious share options ?.
> 
>

Ah, but if you and I get ourselves elected to the board and plugged into 
the gravy train ourselves then it won't matter will it statkey?

I'm only being slightly cynical in this answer, in that the original 
question contains an underlying sentiment of fat cat directors getting 
rich while small shareholders are ripped off.  Yet previous to that 
comment statkey, you expressed the idea that it would be great if WRI 
had a dividend reinvestment plan so that existing shareholders were 
able to get more shares while the existing management got none!

I don't think it is inevitable the the interests of shareholders and 
management are always opposed.  I am very happy to hold my shares 
in WRI, and I hope that existing management are more than capable of 
running the business without me looking directly over their shoulder.  I 
also hope and that management are paid a fair and competitive salary 
package to work for me, as a shareholder.  They need my capital to 
run the company and I need them to do the work - a good basis for co-
operation.

I see from page 22 of the WRI 2002 Annual report that if all options 
currently on issue are exercised then earnings per share drops from 
15.8c to 14.9c.    

This is based on the 6.2 million options outstanding diluting the 
134.2m shares already on issue.

15.8c x ( 134.2/ (134.2+6.2) )= 15.1c (near enough to 14.9c)

Is that excessive?  My gut reaction is I don't think so, but maybe 
shareholders of PGG and WKL reading this might like to dive into their 
last annual report and and tell us the number of options outstanding 
verses existing shares for those companies?   Perhaps I am wrong and 
WRI senior management are excessively greedy?

SNOOPY

discl: hold WRI


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