Board of Director Compensation - Comments From Tom SchmutzYesterday, I sent the following email to Flyht regarding BoD compensation: Hello, On May 9th, Flyht announced it was granting incentive stock options to employees, officers, and directors. This action appears to have precipitated a 20% decline in the share price. Since then, many members of the relatively large board of directors have not taken advantage of the low share price to take a stake in Flyht. The market recognizes the need to compensate employees and retain talent in the highly competitive aerospace industry. The market also clearly thinks that Flyht is unfairly compensating some talking heads on the board of directors, while shareholders are left to dry.
My question is this: After the decline beginning May 9th, Will there be any changes going forward in how the board of directors is compensated, and will there be changes in how compensation is communicated to the market?
Thanks, and keep up the great work.
I was very pleased to get a swift reply from Tom Schmutz:
Hi
[extremely intelligent shareholder], thank you for your interest in FLYHT.
I believe that he principle reason that the FLY.V stock price has drooped this year (outside of overall TSX market performance and FLY financial performance expectations) is because of the significant price pressure that resulted from a small cap mutual fund that exiting their position. They began to unload in February and gradually increased until the stock fell pretty hard. Some friendly shareholders orchestrated a block purchase to stop the bleeding. We have been stable since.
The Stock option program is the primary means of incentivising the BOD, Mgmt and employees and is a program that has been in place since the early years of the company. Each year it has essentially been conducted the same; although this year we extended vesting over 3 years rather than immediate vesting to reduce the impact to the quarter that the options are issued. I don’t personally believe that the issuing of the stock options this year was relevant to the reduction of the stock price.
We do have a large BOD relative to some companies our size, but the BOD total compensation is in line with other companies our size because the per director compensation is below average. I encourage you to research this and if you find that we are out of line wrt total compensation please write me back. I will say the BOD has been very helpful for me.
Whether BOD members buy or don’t buy FLY stock is their decision. There are no changes in their compensation planned to my knowledge.
Best regards –
Thomas R. Schmutz,
I hope this clears up some concerns that people on this forum may have. I suggest contact the company if you have any further questions. Again, I was very impressed with the speed I got a reply, and I am satisfied with the answer given.