By Tom Winnifrith, The Sheriff of AIM | Wednesday 9 June 2021
Disclosure: I own shares in one or more of the stocks mentioned. 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.
On Monday morning, Kefi Gold & Copper (KEFI) boss Harry Adams said he was unaware of anyone opposing a plan which would have seen him trouser a $1.5 million cash bonus – on top of his annual drawings of £337,000 – within two years just for doing his job. I made it bloody clear that I was livid and would vote against all proposals at the forthcoming AGM if Harry did not think again. Today he did the right thing and thought again.
Yesterday I upped the ante saying that if Kefi did not abandon the scheme I would encourage other shareholders to vote down everything at the AGM. Gradually it has dawned on Harry and his advisers from the crony capitalist bubble of greed and grotesque overpay, that is the City, that most of his shareholders are not private investor “traders” but Long Term Holders and that we all felt the same way and that the GM could be a bloodbath. 17% of the equity is owned by institutions and management but we smelly dirty peasants own 83% of the shares. It is we, Harry belatedly realised, who call the shots and there was a very real threat that we might mobilise and cause real problems.
One suggestion put forward by ShareProphets reader PL and relayed by me to the company was to link the three tranches of ‘arry’s bonus not only to operational targets but to share price targets at 3p, 4p and 5p. And that proposal is exactly what Kefi has taken on board. For Harry to trouser each tranche of $500,000, he needs to hit the original performance targets but the shares to stay about the price target (3p for T1, 4p for T2 and 5p for T3) for five consecutive days.
I really do not care if Adams makes £1.2 million as a bonus for just doing his job if the shares I own rocket from 1.9p to 5p as that will pay for an awful lot here at the Welsh hovel. My interests are now aligned with ‘arry’s. That Harry has signed up to this suggests he reckons the targets are achievable and so, as it happens, do I. Just Tulu Kapi alone is worth at least 6p per share to Kefi and its Saudi assets are, arguably, worth more. So this solution is fine by me.
I am glad that my friend Harry has taken it on board and done the right thing. But I make two observations:
1. This episode shows how utterly out of touch AIM CEOs, PR firms and Nomads are with how we private investors feel. It is we who own most of the equity in most AIM companies, outside the few giants. We plebs do not earn £337,000 a year or – in most cases – even a six figure salary. We suffer dilution and are told we are just “traders” when in fact many of us are more loyal than the institutions that Nomads, CEOs and PRs like to blow off and appease.
The loathsome Nomad SP Angel of the fraud MySquar infamy signed off on the original proposal as fair without a second’s thought as to just how unfair and daft it was. These few folks who run and advise companies are like Marie Antoinette: just out of touch with the masses and appear to despise us. They issue ramptastic RNS statements to push share prices up ahead of discounted placements to their beloved City institutions and regard it as fair to treat mug punters as cannon fodder. Of course the ii’s flip the stock and ultimately the shareholder list returns to its normal retail majority.
We plebs are viewed with contempt. I would suggest that AIM might consider the radical step of establishing a pool of ordinary, but suitably qualified, shareholders and to force all AIM companies to have a majority of folks on their Remuneration Committee’s drawn from such a pool. Take pay away from the old boys’ network and allow Joe retail to call the shots. And mandate the representatives of Joe retail to link pay with performance and AIM would be a better place, a true shareholder democracy.
2. This episode shows ShareProphets carries a big stick. I realise that the savants of the Bulletin Board community dismiss us but it was this website that not only flagged up this shitshow, but marshalled the anger of private investors and also maintained a dialogue with the company making it aware of the dangerous road it was going down. This is a big win for this site in the fight against executive greed. Natch I am not holding my breath waiting for the dull suits at ShareSoc and the BBMs to publicly express their appreciation for this..
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