I just recently received my annual report and proxy. I'm just curious as to how other shareholders viewed the proposal to reprice management's stock options to a lower exercise price. I voted for it, because I figure these guys will have more incentive to do something, anything, if they have a vested interest in seeing the stock go up.
By the way, we're talking about a significant number of options being repriced based on the info. in the footnotes. It looks like around options for 1.8 million shares will be repriced as the lowest exercise price for these options is $11.00 Canadian.
The other really amazing thing is looking at how much expenses have increased in comparison to substanially flat software sales. The sales and marketing workforce increased from 105 employees to 159. A cool 50% increase in marketing personnel, yet sales are flat? Don't worry though, according to the MD and A, "Investment in sales staff, travel, marketing materials and trade shows can provide the foundation for future sales." Isn't that comforting?
It was also pretty interesting that three of the four outside directors decided not to stand for re-election. Between that and the recent resignations of several officers it kind of gives you the feeling of rats leaving a sinking ship.
But let's keep emphasizing our strong cash position. (Which we obtained via the secondary offering, just prior to the major league swoon the stock took all those many, many months ago.) We can probably use that cash to hire another hundred or so marketing people in order to keep sales flat and continue to build that foundation.
One last thought/gripe, did anyone notice the healthy raises the top five executive officers got? My favorite is the chairman whose salary increased from approx. $400,000 Can to $620,0000 Can. His salary increases must be tied to increases in the number of sales and marketing employees, and the increase in expenses. It certainly not tied to software sales increases. At least they didn't have the gaul to pay themselves bonuses. Pretty interesting to see a decline in the number of options granted to the chairman in the current year. 1995 he got 225,000, 1996, 125,000, 1997, 100,000. You would think that with this solid foundation that they're laying for future growth that he would take less salary and more options to take advantage of the impending bonanza.
Regards,
Unoo |
