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Monday 29th March 2010 |
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The top two executives of Renaissance, the IT and Apple products distributor whose shares have fallen 43% over 12 months, will reap a fat bonus in three years’ time – provided the stock climbs 809%.
New chief executive Richard Webb and chief financial officer Shaun Rendell opted to forgo the short-term cash incentive provided to their predecessors and take all their “at risk” pay by way of shares in the company.
The company last week gained an NZX waiver for the plan, which was required because the decline in its share price means new equity issued to the executives would amount to 3.4% of the company’s capital. When a similar scheme was provided to former CEO Paul Johnston and CFO Clive Lewis in 2008, it amounted to 1.5% of issued capital.
The stock rose 10% to 22 cents today. It was above $1.50 in early 2007. The executive share scheme kicks in on a pro rata basis above 50 cents, with Webb entitled to a maximum 1.1 million shares and Rendell to 372,000 shares if the stock reaches $2 in three years.
Webb says he is “absolutely” confident the shares can rise that much.
“The fact of life is that being an intermediary, third party shifting boxes is not the future,” Webb told BusinessWire. “The future is adding value to the process, so we’re introducing a whole range of applications.”
Having Apple as a partner “is spectacular,” he said.
In a market update today, Webb said guidance for revenue in calendar 2010 is $205 million, with EBITDA of $3.5 million. Trading in the first two months of the year is ahead of the same period in 2009 and ahead of budget.
That’s an improvement on the 2009 results, when sales rose 2.7% to $194.8 million while EBITDA dropped 72%to $1.3 million, reflecting the impact of recession on its MagnumMac and Renaissance Education units and one-time charges.
Former managing director Paul Johnston, in the role since 2003, resigned effective the end of 2009, saying recent results “have not met expectations.” Former finance director Clive Lewis left the company in mid-January.
The company provided forecasts for the full calendar year though it has changed its balance date to September 31.
Businesswire.co.nz
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