RE:RE:RE:NPK Trading Since Q4 resultsHi Stanmore,
This was exactly the kind of response I was hoping for. As always, you've put a great deal of thought into how this situation can be handled. Much appreciation for you and the VSG you've organized for keeping tabs on the company. I only hold 8,000 shares, but would be happy to add my name to the list if you need additional signatures.
All the best, BCdude
15Stanmore wrote: Hello BCdude,
Thank you for your recent post in which you said:
There seem to be many of us who beleive the CEO compensation package is out of line with the actual results of the company. What do you propose we do about it?
I believe Mr. Veloso has already acknowledged the concerns raised by shareholders and has communicated that he believes his compensation package is appropriate. On the other hand, his recent "voluntary" decision to add escrow conditions to the shares issued in March to cover his (and Mr. Paolucci's) 2020 salary as well as on the just awarded 750,000 $1.22 10-year share options, suggests he agrees that the current compensation arrangements and the terms and conditions of the current Verde Stock Option Plan need to be amended (otherwise he would not have thought the escrow conditions were necessary). I do not believe further appeals to Mr. Veloso to reconsider his personal compensation arrangements and to negotiate and accept a more appropriate and balanced package will produce any results.
So how do shareholders communicate their concerns?
The Verde Shareholder Group is preparing a communication to be sent to Mr. St Aldwyn as the Lead Inpependent Board member and to the Chair of the Compensation Committee setting out the Group's consensus concerns over the current CEO compensation arrangements at the Company. This will likely include a request to include for the first time the standard "Say-on-Pay" motion in the 2021 AGM for shareholders to formally communicate their position on executive pay. With 5% of shareholders requesting this motion be included, the Board must do so. As the VSG currently represents 21% of the issued and outstanding common shares of the Company, I believe it is safe to say that Say-on-Pay will be on teh agenda at the 2021 AGM.
Under the TSX rules, a Say-on-Pay motion is non-binding on the current Board, but can communicate a very clear message if the majority of shareholders vote their disatisfaction with the current practices being executed by the Board. As a direct beneficiary of the Compensation practices in question, Mr. Veloso would be prohibited from voting his 9 million shares in support of the Say-on-Pay motion as he would be in a Conflict of Interest and must remove himself from the vote. Interesting to note that 72 percent of companies in the TSX mid-cap held a “Say-on- Pay” advisory vote for their executive compensation policy in 2019, with 7 percent of companies holding a say-on-pay vote for the first time. In my opinion it will a positive step to see Verde join their ranks.
Moving to a different part of Verde's compensation arrangements, the current Stock Option Plan must come before shareholders at the 2021 AGM, and the VSG has already submitted our recommendations for changes to the existing Plan under which some of the current compensation issues being discussed originated. Shareholders will be given the option to express their opinions about the SOP, and whether any changes brought forward by the Board are sufficient and acceptable to them. If not, they can vote against the Plan as presented, sending it back for reassessment and resubmission at the next AGM or special shareholder meeting.
And lastly, we shareholders can keep watching like hawks to see that the recently disclosed 2021 compensation arrangements, terms and conditions are dutifully followed and implemented.
Cheers,
S