The problem with the DCF model as per the likes of SLR, it stands for "Diverted Cash Flow" ... to staff & directors and the WA economy. The former 'revered' MD and founding director, in addition to conducting several highly successful CR's (mostly from outside WA) which helped expand SLR and the WA economy, has managed to extract in gross salary since becoming the founding MD in 2007, an accumulative gross income of $3,833,597 ! (FY 2017 not included)
The following figures are extracted from the annual reports MD gross income: FY 2008 $254950, FY2009 $256450, FY2010 $303152, FY2011 $511506, FY2012 $719385, FY 2013 $587999, FY2014 $494166, FY2015 $570831 ( he stepped down as MD in November 2014 and became a NED on $81k +super etc and yet still "earned $571k as MD .... talk about a golden parachute!).
And like the other founding directors cashed in his free options in 2011 for $11m or so ....
Cool Hand Luke came on board in 2013 as "Director of Operations" and in FY 2014 grossed $520459. In November 2014 he went from acting MD to fully fledged MD and in FY 2015 grossed $1.112883, FY 2016 $1,1148491, FY2017 $1.148491. According to the Business News WA, Cool Hand is the 49th largest corporate salary earner in WA, and SLR has the 20th highest cash flow .... amazing.
Cool Hand issued a grave warning to the WA government (
https://thewest.com.au/business/sil...ff-over-wa-labors-gold-tax-hike-ng-b88607851z) about the potential impact of the proposed increase in the gold royalty on companies like SLR where it would eliminate all the hard won gains of the last few years and take more than $2m from the bottom line .... OMG, SLR recently reported a net profit of (only)$2m .... Most gold miners inject enormous amounts into the GDP of the WA economy and the vast majority of the proceeds of gold mining stay in WA .... they don't pay dividends or the like .... is the premier really going to kill WA's golden goose ... apparently not! SLR has produced over 1m oz's and never paid a dividend ... the entire proceeds of that gold and all the cap raises stayed in the WA economy !
I digress ... Les Davis is not an independent director, rather he's highly dependent on SLR for his financial well being, and continues to exercise undue influence as a director and chairman of the remuneration committee, despite his gross failure as MD! He should have been sacked and sent packing, not given a well-paid sinecure.
As part of the renewal process, all directors involved in the SLR's period of maladministration should be replaced with genuine independent well-credentialed directors.
The one thing that cant be denied is how fantastic SLR has been at reports and presentations. Remuneration is a compilation of a base salary ... say $0.5m plus STI of up to 50% and LTI of up to 75% of base salary.
The base salary appears to be a 'turning up to work' fee, and the STI is for doing the work in your job description, and LTI is for any achievements. If you fail or have any part in a SNAFU, STI and LTI don't need to be refunded. The worst that can happen is a termination with 6 months full salary and a glowing reference.
Until SH see real returns, there should be no STI other than "turn up to work, do what you're paid to do ... or else you'll be 'moved on'.
Yes, I'm a bit 'bitter & twisted" but this is positively my last word on this subject as its bad for one's mental health, its a waste of time and it's futile ... Plus ça change, plus c'est la même chose.
