Re: the compensation plan.
Pick a P/E, any P/E for IATV once profitable. I'm gonna say 100, but pick whatever P/E you like. For a stock like this just turning profitable, the P/E could be even higher, but I'll be reasonably conservative and pick 100.
At a P/E of 100, every penny of earnings, will raise the price $1.
Raising that price $1 will raise the market Cap $33 Million (assuming no dilution via Liberty exercising options, which I'm sure they will do, so it will actually raise the market cap more than $33 million).
2% of that 33 Million is $660K.
$660K is 2 cents per share.
So, what this means is that for every 1 cent in earnings they make, we're going to pay them 2 cents. Makes no sense to me at all.
Sorry for nit-picking but the numbers just show exactly how much we're getting screwed. If you give a P/E of 200, then we're paying them 4 cents/share for every cent/share that they are earning... If you drop the P/E to 50 then it's break-even, but at a P/E of 50 we'd need to earn 33 cents a share to maintain the current stock price.
If you want a high stock price, you're going to want a high P/E, but if you give a high P/E then you're going to give management several times our entire earnings each quarter. How many quarters do you want to see the compensation plan equalling 50% or more of expenses? Unrealistic. Give them the same stock options that every other executive gets... Samuels is worth what, $100 Million now? Give him stock options so he can keep making himself filthy rich, no need to shoot the company in the foot financially at the same time. I feel like we're handicapping our future performance this way. A traditional options plan allows the execs to grow deservedly wealthy while allowing the stock price to appreciate.
Please vote NO for item #2.
-Mike |
