If market capital goes up, SH's are richer, if benchmark index...

If market capital goes up, SH's are richer, if benchmark index is reached or above, SH's are better off, and $240,000 PA on a $336,000,000 MC seems relatively small.

It's not just the admin fee; its the performance fee, plus the management fee in the end.
If you add all those up, you could get a cost to the company of several millions of dollars, certainly a multiple of what it would cost to employ one or two additional executive directors.

But its not just the direct cost of the Manager that is the issue for me; it is also the distortions to incentives that the Manager's fee structure risks inducing; the Manager maximises its reward by making the market cap of the company bigger, meaning that it could acquire in an ill-disciplined manner and raise capital to do so, and it will benefit financially. However, that situation would not necessarily be in the interests of the owners of the business.

Besides the direct cost issue, I see a misalignment of interests of the Manager and the Owners.