AI
Friday, April 19, 2019 4:39:07 PM
How to Vote your ATOS Proxy IMO.
I received my proxy today. The following is why and how my vote differed from Board recommendations.
Proposal No. 1 – Election of Directors
Mr. Quay should not be both the CEO and Chairman of the Board. Unfortunately, it does not appear that shareholders have a say in this matter. The election of Mr. Quay and Mr. Weaver looks to be pretty much a done deal. However, I withheld my vote for Mr. Quay as a protest in that he has too much control over the Company.
I voted FOR Mr. Weaver and WITHHOLD on Mr. Quay
Proposal No. 3 – To Approve the 2019 Amendments to the Atossa Genetics Inc 2010 Stock Option and Incentive Plan and to Increase The Number of Shares Authorized for Issuance Under The Plan By 3,600,000
This is one of the most egregious requests I have ever seen by a public company and my vote here is a no-brainer. A 26% dilution to existing shareholders that is almost exclusively for the benefit of the CEO and CFO as a reward for what? Management’s performance since Atossa became a public company has been atrocious. On a split adjusted basis, the stock once traded at over $1,500/share:
Note at the IPO in 2012, Mr. Quay owned over 5,000,000 shares (37% post IPO). However, through two reverse splits (and probably some sales along the way), his beneficial share interest has dropped to 82,667. Would have been great for investor confidence if he bought 200,000 shares at $1.36 instead of taking 2.3M no-risk options.
Lastly, the wording of Proposal No. 3 is very deceptive for what it doesn’t say. View prior post here.
I voted AGAINST Proposal No. 3
Proposal No. 4 - Advisory Vote on Executive Compensation
While I agree with the stated philosophy of “tying compensation to increases in stockholder value,” the number of option shares granted to Mr. Quay (2,300,000) and Mr. Guse (800,000) is over the top. Fortunately shareholders can stop this by voting Against Proposal No. 3. A similar vote is required here to express shareholder dissatisfaction with the overall compensation package.
What is the right number of options? Given an exercise price of $1.36/share, I could support 230,000 shares for Mr. Quay and 80,000 shares for My Guse. If Atossa hits on its Oral Endoxifen, the Company could easily run to a $500M market cap. With 9,124,447 common shares outstanding as of the record date, that equals a per share price of $54.80. In other words, $12.3M for Mr. Quay (as opposed to $123M) and $4.3M for Mr. Guse (as opposed to $43M). Most CEO's of Fortune 500 companies don't earn $123M in stock compensation. $166M for the CEO/CFO of a micro cap, outrageous.
I voted AGAINST Proposal No. 4
Thanks for taking the time to read my post. Now go vote your Proxy.
I received my proxy today. The following is why and how my vote differed from Board recommendations.
Proposal No. 1 – Election of Directors
Mr. Quay should not be both the CEO and Chairman of the Board. Unfortunately, it does not appear that shareholders have a say in this matter. The election of Mr. Quay and Mr. Weaver looks to be pretty much a done deal. However, I withheld my vote for Mr. Quay as a protest in that he has too much control over the Company.
I voted FOR Mr. Weaver and WITHHOLD on Mr. Quay
Proposal No. 3 – To Approve the 2019 Amendments to the Atossa Genetics Inc 2010 Stock Option and Incentive Plan and to Increase The Number of Shares Authorized for Issuance Under The Plan By 3,600,000
This is one of the most egregious requests I have ever seen by a public company and my vote here is a no-brainer. A 26% dilution to existing shareholders that is almost exclusively for the benefit of the CEO and CFO as a reward for what? Management’s performance since Atossa became a public company has been atrocious. On a split adjusted basis, the stock once traded at over $1,500/share:
Note at the IPO in 2012, Mr. Quay owned over 5,000,000 shares (37% post IPO). However, through two reverse splits (and probably some sales along the way), his beneficial share interest has dropped to 82,667. Would have been great for investor confidence if he bought 200,000 shares at $1.36 instead of taking 2.3M no-risk options.
Lastly, the wording of Proposal No. 3 is very deceptive for what it doesn’t say. View prior post here.
I voted AGAINST Proposal No. 3
Proposal No. 4 - Advisory Vote on Executive Compensation
While I agree with the stated philosophy of “tying compensation to increases in stockholder value,” the number of option shares granted to Mr. Quay (2,300,000) and Mr. Guse (800,000) is over the top. Fortunately shareholders can stop this by voting Against Proposal No. 3. A similar vote is required here to express shareholder dissatisfaction with the overall compensation package.
What is the right number of options? Given an exercise price of $1.36/share, I could support 230,000 shares for Mr. Quay and 80,000 shares for My Guse. If Atossa hits on its Oral Endoxifen, the Company could easily run to a $500M market cap. With 9,124,447 common shares outstanding as of the record date, that equals a per share price of $54.80. In other words, $12.3M for Mr. Quay (as opposed to $123M) and $4.3M for Mr. Guse (as opposed to $43M). Most CEO's of Fortune 500 companies don't earn $123M in stock compensation. $166M for the CEO/CFO of a micro cap, outrageous.
I voted AGAINST Proposal No. 4
Thanks for taking the time to read my post. Now go vote your Proxy.
