Forum Archive Index - October 2000

["Steve Moxham" <stevemox@e3.net.nz>]

Brian B wrote: "Following on from Brian Gales last post and the thread in general has any of the research, especially that discussed in the "unlimited" article, unearthed any companies who are shining examples of how this issue should and can be tackled. Now that we have identified so many negatives can we find some positives so that  as disgruntled shareholders we can stand up and illustrate how it could be done with some confidence."

 

In March '99 Steve Outtrim offered half of his 70% holding in Sausage Software to Wayne Bos provided that he could double the share price from 25c and keep it there for 40 days.

One month after his appointment the share price reached $1.40 and one year on it traded at $8.20. This was obviously an attractive package and helped along by the internet stock boom, but it also came with a sizeable requirement - to double the share price. 

From this example it could be said that you should set high targets and offer high rewards. Don't set mediocre targets or reward mediocre performance.         

The issue of options to executives of SAS are again in the news with Shareholders decrying the terms on which they were to work. Read on below.

 

Sausage tries new options package

By ELI GREENBLAT
Tuesday 24 October 2000

The much-attacked Sausage Software options package has been resurrected, with outgoing chairman Gil Hoskins and the already-departed director Alan Studley to get two million and one million options respectively.

But the plan to issue six million options to Wayne Bos, who has also resigned from the company, has been dropped.

Mr Hoskins told The Age last night that the deal was a "very different animal" to the scheme that was first mooted and subsequently withdraw in September.

The new package, which will be put to shareholders at the annual meeting on November 21, will see the options expire in one year rather than in 2010 under the original proposal.

Mr Hoskins will formally resign as Sausage Software chairman after the AGM, while chief operating officer Alan Studley resigned unexpectedly last month. Neither will not seek re-election.

Mr Hoskins said everyone should be happy with the new expiry date, as the options - with an exercise price of $2 - were now extremely out-of-the-money compared with Sausage Software's closing price yesterday of $1.29.

"These options have no real value at the current Sausage share price, and if the price fails to move above $2, then the options would probably be worthless and lapse," he said.

However, if Sausage Software's share price was to go beyond $2 within a year, he added, then shareholders would be satisfied and accept the granting of the options.

Mr Hoskins said the remuneration committee and the Sausage board had all voted in favor of the revised scheme, and he was confident shareholders would also approve.