Snouts in the trough - it is getting worse

Snouts in the trough - it is getting worse

THIS HAS BEEN RESENT AS THE SERVER WAS DOWN YESTERDAY AND SOME SUBSCRIBERS MIGHT NOT HAVE BEEN ABLE TO ACCESS THE WEEKLY THAT WAS SENT.

This week we have decided to highlight the growing trend whereby companies are issuing directors performance rights as incentive to get them to do the jobs they are already employed to do. It is a method of turbocharging the rewards to directors rather than issue securities like options, and if used inappropriately, it is just another way directors rip value away from shareholders.

The recent trend has been to set the milestones ridiculously low, thereby inducing a wealth transfer from shareholders to the board and the executives. It is another example of the thievery that unfortunately pervades the junior mining sector.

The ASX doesn't seem to care about this practice provided all the compliance boxes are ticked, and shareholders have a vote. The trouble is that no-one has the time to read the extraordinarily long and complicated notices of meetings that can go onto dozens of pages. The real meat of the issue - the vesting hurdles - can be very hard to find because of all the regulatory and compliance crap contained in these notices. It is bit like a prospectus. No-one has time to read them but lawyers, accountants and other professionals make a killing with their hourly fees ... and still the crappy companies keep coming.