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Silk Energy Ltd SLKEF

Silk Energy Limited is a Canada-based resource company. The Company acquires undervalued oil and gas assets in Kazakhstan. The Company, through its subsidiaries, owns a 50% interest in the KMG Ustyurt license (Ustyurt). The Company focuses on exploring and developing Ustyurt, an onshore oil and gas concession comprising approximately 6,500 square kilometers in the Caspian Sea region of the Republic of Kazakhstan.


GREY:SLKEF - Post by User

Bullboard Posts
Comment by victor2009on Oct 26, 2010 12:23pm
384 Views
Post# 17613084

RE: Insider Activity

RE: Insider Activitysurething1111,

I don't know why the "new guy" was included in the August offering for one million, but wasn't granted options in the latest distribution. It may be that in preparation for his heavy commitment of time in talking with shareholders, they thought he would be better received if he had not recently been rewarded. As for Randy, he only picked up a quarter million of options this round, but remember he did get one million in each of the last two rounds this year.

There hasn't been any forum comment on my question as to the rationale behind these rounds of option granting, but I did get a verbal opinion from an interested party. His theory is there isn't really much going on at the BOD meetings, so they play a round of musical chairs to see which Director, financial advising firm, geologist or investment "portal" analyst will be relieved of their duties. They then decide who will replace the recently departed, and draft a Press Release announcing how this change will greatly benefit the company. One of the Directors points out that the replacement is not  the proud owner of any options, and how could he possibly be motivated to add to shareholder value, without this carrot on a stick. The Compensation Committee is then convened to determine what would be an appropriate number of options, and while they are at it they usually decide that activities of the team warrant an additional granting of options to team members, as it is obvious that prior grantings have not sufficiently motivated the team to add to shareholder value. They then play a few games of Texas Holdem, to decide who will be the lucky recipient. (It's a game that was introduced by a former insider and recipient of options, that brought the game from his home state when he came up to organize things at Langmuir and further add to shareholder value.) With all this business looked after, they all go home, unless they have a dinner date with aatozz to explain management strategy and corporate plans.

Actually, this option granting is nothing to worry about anyway. Anyone otherwise concerned can pick up a copy of a recent MD&A, which explains that there's no cash involved, and there won't be any dilution or benefit if the share price doesn't go up. This is very comforting to a shareholder, as most will be relieved that those guiding the company will not benefit as his investment deteriorates - well, except for the cash remuneration, expense allowances, NSR proceeds, and maybe a generous retirement allowance if Randy dies, retires, becomes disabled, resigns for "Good Reason" or is otherwise terminated. It appears that this parachute may not kick in if he is snatched by aliens, or if he resigns for "Bad Reason".

As you say, what the heck, this is ISM after all!
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