By Tom Winnifrith, The Sheriff of AIM | Wednesday 28 December 2016
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.
112 minutes after the stockmarket closed on the Friday before Christmas Avanti Communications (AVN) published a red flag strewn annual report. I have already raised one mighty red flag HERE and more will follow. But now just consider how the bombastic prick of a CEO David Williams was rewarded so handsomely for failure. Shares in Avanti are just 23p today. They were c£8 when Williams sold millions of quid worth of shares as he ramped away after the launch of Hylas 1 back in 2011.
I was one of those who believed Williams's claims - backed by wanktastic broker research - that the shares would go to £20 or higher and that his sale was for personal reasons. Of course it was: to make as much cash as possible from a seriously over-ramped stock. The shares are now 23p but while shareholders have suffered as the company has missed every operational target going and slowly drowned in debt, Williams has not suffered as the annual report reveals.
It is true that Williams did not get a bonus as he had in 2015 ( $484,651). What was that bonus for? Missing all operating targets or the share price halving?
But Williams did see his basic pay jump from $564,788 to $639,529. Of course Williams is actually paid in sterling and sterling weakened so that headline number masks the true extent of the inflation busting pay rise. What justifies such an increase? We know Williams is greedy but given the mess that Avanti is in and how its shares cratered during the year to June 30 2016 how on earth can any pay increase at all be justified?
The overall value of Williams package fell in sterling terms to £538,865 from 734,333 which seems steep but in fact if one strips that whopping - and wholly unjustified - 2015 bonus there is acttually a sharp increase in the take-home. Please can Avanti's NEDs explain to long suffering shareholders what justifies that?
This is the sort of behaviour that gives capitalism a terribly bad name.
Never miss a story.
This area of the ShareProphets.com site is for independent financial commentary. These blogs are provided by independent authors via a common carrier platform and do not represent the opinions of ShareProphets.com. ShareProphets.com does not monitor, approve, endorse or exert editorial control over these articles and does not therefore accept responsibility for or make any warranties in connection with or recommend that you or any third party rely on such information. The information available at ShareProphets.com is for your general information and use and is not intended to address your particular requirements. In particular, the information does not constitute any form of advice or recommendation by ShareProphets.com and is not intended to be relied upon by users in making (or refraining from making) any investment decisions.
Comments are turned off for this article.
Search ShareProphets |
Stock market news |
Recent Comments |