High River Gold Mines Ltd HRIVF

HRG management

[SergeBrunet]

Reading through the director's circular, it was interesting to find out that the present management members (Dan H, Edward V,, Driffield C. and Steven Poad (also an administrator)) have signed employment contracts which stipulates that they will get a nice severence package if they continue doing nothing to firm up the enterprise value...

There is a nice table in the circular which shows the amount of these severence packages (ranging from ¼ million to 0.8 million) in the event that the company is 'taken over' and if they are asked to move more than 50 km from their present location, which would surely happen if HRG becomes private and the head office is moved to Russia...  why bother doing a good job for all shareholders when the major shareholder is dangling such a carrot... they can see the writing on the wall... do nothing and get rewarded... otherwise, it would not have been such a hard thing to do for the CFO to renegotiate all deals and postpone payments/obtain better terms with the assets HRG has...  hard and ethical decision to make to do one's job and potentially resign due to pressure to underperform or do your master's bidding... and get the jackpot for being a loyal servant.

That might partially explain Dan H.'s and the administrators' behaviour/stance reported by people attending the AGM (and the presence of bodyguards...).

However, they would not get a penny if Mordashov decided to keep head office in Toronto after the 'going private' for 18 months and one day...

Have a great day!
SB