Ann: Change in Chairman's Role, page-3

Well... Last FY Mr Cheetham received ~$700k. Next FY it'll be $150k...
There's a huge saving, relative to NPAT.

Yes, @Klogg, this adjustment was some time in the making.

I am always highly sensitised to the way the family members pay themselves in these sorts of small, family-run businesses.

Ordinarily, for a company of SDI's size, I think $80kpa to 100kpa is a reasonable fee for a Non-Executive Chair.

But given:

1. the degree of technical and product complexity of this business,
2. it's operations across multiple geographies, and
3. in the form of J Cheetham you don't just get someone to chair meetings, oversee boardroom protocols and ask a few strategic questions of the company's executives; rather you also get someone, with a strongly vested interest by virtue of a very substantial shareholding, who possesses decades of experience and a deep understanding (deeper than anyone else in the company, I'll wager) of all aspects of the business.

So, in effect, we are paying Mr Cheetham an annual "retainer" of around $50k to $60k (the premium over the fees payable to a normal, garden variety chairman) to be on standby as a resource to the business with his deep and unique experience and valuable insights.

Put another way, given the choice between the current $150kpa cost to the business, and Mr Cheetham disengaging from the business and a new chair being appointed with the attendant $50k to $60k in saving, I know which way I would vote.

I think that, as shareholders, we'll make back our extra $50k to $60k many times over under Mr Cheetham's continued association with the business.

The other individual that we don't want to see walking in front of any buses is the company's COO/CFO who I think earns his keep in a more-than-satisfactorily manner.


And yes, that's the thing with small companies: the remuneration of their executives is highly material compared to the profit levels of such businesses, so the $550k reduction in Mr Cheetham's fee is meaningful in the context of the SDI's Pre-Tax Profit which is currently running at around $7.5m to $7.7m.

Of course, I suspect some upwards adjustments will be made to the remuneration rates of some of SDI's executives who will be taking on some of the duties now being relinquished by Mr Cheetham under his new brief.

So, maybe $300k or $350k of the $550k reduction ends up reporting to the P&L.

That's still a 4% to 5% tailwind to SDI's FY2018's earnings at the Pre-Tax line.

Accoriding I will be voting in favour of the increase in the NED's feel pool increasing from $400kpa to $450kpa