Chris,
Let me make sure I understand options correctly. The way I understand it, when the options were granted at $3.66, that meant that the option holders weren't forced to buy the shares at that price if they didn't want to. So, if the price of WSP went to, say, $5.66, they could say, hey, I want those options exercised, here's $3.66 a share for what is now $5.66 worth of stock. Then they could turn around and sell the stock the next day for a $2 profit with absolutely no risk. Am I right so far?
So now, the stock has gone down to $1.45. Now the rules are being changed, and the goal post moved. Now, if the stock goes to $3.62, less than the original exercise price, they can say, "Give me that stock," and turn around and sell it at a $2 profit at no risk to them. Now before, when they could only exercise the options at $3.66, the WSP treasury would be increased by $3.66 times 2,400,000. With the change, the WSP treasury will get $1.62 times 2,400,000 - which gives the company many less dollars in its treasury.
Now tell me if I got anything wrong there. Because if I did, I want to know.
Add to the equation that the price of the stock has gone from $3.66 at the time of the option announcement to $1.45 today. So WSP management is saying, if I understand correctly, "We don't care that shareholders who owned the stock at $3.66 have lost $2.21 per share. We're doing such a great job that we want an extra $2.04 times our option number.
A question: if the stock price was at, say, $4 now, would they have given themselves more options at $4?
More questions: How many options do each of the officers get? What is their annual salary? How does their annual salary compare with others in the mining industry?
Now, if WSP comes up with good results and the stock goes to, say, $10, people with options will make how much money each? And we know that what they're getting is risk free, unless I don't understand correctly.
Chris, you're a CEO of a company. Your's isn't publicly traded, though, is it? If your company was publicly traded, and was trading at $1.62 and you had options at $3.66 when your stock was trading at that price, would you reprice your options with the help of the Board of Directors? Or would you think that doing something like that would be ethically and/or morally wrong? If you were working real hard, couldn't you ask the Board to raise you salary to compensate you without reducing the money that would eventually see its way to the treasury or sticking your fingers in shareholders' eyes?
Just a bunch of questions I have that you may be able to answer. Maybe I don't understand things as I should. But if I'm half right, I don't think we should complain for a few days and then go on about our business. That is what WSP is hoping we'll do. We need IMHO, to keep up the pressure.
Has anyone who has spoken to Randy on the phone know if he understands that what the Board did was morally questionable? Does he think that all the criticism is unjustified?
Tomato |
