Forum Archive Index - May 2003

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

Hi statkey,

> 
> regarding the executive pig trough, is there some other way to reward
> them  without giving away the farm. re page 22 in annual report they
> have  EVA Option Plan, Executive Option Plan and Senior Executive
> Securities Plan. Plus they get a salary with perks. 
>
>

I have a favoured solution to avoid the overall share pool ballooning 
with the issuing of new shares.    I feel the company should buy its own 
shares on market  to exactly match the shares being created under any 
option plans.   That way, existing shareholders interests are not 
diluted. 

>
>
> Executives are unjustly enriching themselves.
>  I dont have a problem with paying them big bucks but when
>  in 5 years time they get to buy shares for
> 15.5c a share thats unjust. 
>
>

Personally I do have a problem with paying the big bucks if senior 
managers don't perform.   I am all in favour of putting some part of their 
salary package 'at risk'.    And I think linking any such bonus payments 
with what happens to the share price does align senior management 
interests with shareholders interests.

I'm not sure that some lucky senior executive will really be able to cash 
in their options by paying only 15.5c.    Are you sure you aren't 
confusing 'option price' with 'excise price'?   According to my reading of 
that section starting on p21 there is also a price that is payable to 
exercise these options, starting at 90% of the prevailing market price of 
WRI shares and indexing upwards from there.  You have to add that 
figure to the options price to get the actual cash that must be handed 
over to obtain the WRI executive plan shares

>
>
>No this creeping control has to stop. 
>
>

I wouldn't class it as creeping control.  I think that most senior 
executives cash in their option shares and flick them off on the market 
to someone else.    That way they get to keep the cash difference 
between the excise price and the options price.   Hauling out real 
money to buy and hold shares would be untenable for most of them 
IMO.

SNOOPY


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