Salary reductions should be permanent
Temporary salary reductions were mentioned in July 29, 2020 press release, with 20% for CEO. Given the terrible bottom line results and the very significant negative cash flow from operations ($2.7m), the CEO should volunteer to make his own reductions permanent. Indeed, the reductions should be much larger, and permanent. Read on.
The CEO was hired in January 2018 at $250k and also given 4m options, which after the reverse split is 800,000. Less than a year later, his salary jumped a whopping 50% to $375k. Page 8 of the recent MD&A discusses the increase in “people costs” and mentions “…the alignment of the CEO compensation to market during fiscal 2019.” Was the fact there were 4m options awarded to the CEO fully considered during that “alignment”?
“Market” is based supply and demand for the particular employee, and would reflect the past experience of the individual and accomplishments to date etc,, and honest expectations for what they would deliver in the future. Do we have any feel yet for whether the assessment of “market” in October 2018 was wrong? What was delivered?
Losses from operations for fiscal 2019 and 2020 combined are an incredible $5.8m ($2.5m + $3.3m). Repeat, $5.8m of operating losses. With that type performance over 2 years, what is the best guess as to the “market” for the CEO today?
Does the CEO need a further haircut?
There is more to say. Please say it.