Additional info regarding the proxy vote that's making me reconsider my vote.
I'm hesitant to even bring this topic up again, since it caused so much bad blood on I-Hub and probably strained many long-standing friendships -- which is sad. But, before everyone goes to the shareholder meeting with both guns blazing, I wanted to share.
I had a conversation with David Collins at IR, and the proxy was among the issues. Although he agrees that the proxy was not handled well at all by Wave, and the plan could have covered a shorter period, rather than seven years, he has no problem with the plan and thinks it makes sense.
He expected resistance to it the way it was delivered, but was surprised at the level of anger. Do people understand where this company is going, he asked? He felt the reaction was far too emotional.
Some of his points:
* When I mentioned the suspicious moving up of the shareholder meeting by two months (which an I-hub member had pointed out), he said last year's meeting was in June, the year before was May 23rd, almost the same date as this years. Either Collins is being dishonest or someone is relaying incorrect info, but I'm sure it's easy enough to confirm.
* He said the company has never abused options in the past, so he doesn't see why some think they would start now.
* Regarding the 500,000 cap, he pointed out that some companies don't even have a cap (I don't know what percent do or don't).
* He said that if the company takes off, do we really believe there won't be any more dilution -- a few million shares a year on average for the options plan is not that much and in line with past history. The pp's dilute more.
* When I asked, he did not know if the rules for board member option grants were the same as other employees, where they would have they same three year waiting period to be fully vested once the program began.
* Although he agreed that employees were fairly compensated with salary, there is a real concern that players with much bigger pockets could steal some key people, or outbid Wave for new talent. He also mentioned that with Wave's cash position over the years, it has been risky to work for a company like that as opposed to a Microsoft or others, with a real concern of whether their salaries would even be paid. The options are a necessary enticement for these reasons.
* When I asked about negative ramifications should the plan be voted down, he didn't see it as a significant negative, but said it never looks good when shareholders are voting against management's wishes -- plus, to redo the plan takes away management focus (although I don't see that to any large extent).
Although I'm sure some of his comments can be easily rebutted, and I still have problems with the plan, it's the gist of what he's saying, that people are really reading too much into this, and this is very much needed to retain and get top talent for the company to do what we hope it will, makes me want to reconsider. So don't rip into how naive I am.
If I had the same conversation with SKS that I had with David, it might not have moved me to reconsider. His incorrect forcasts taint everything he says. But I've known David for awhile. He's very pragmatic has always been a straight shooter, speaking of the company's potential as well as its drawbacks.
One final thought that has made me uneasy. keV and Cygnuscap have been instrumental in this whole discussion and in pushing the "no" vote. Since when do these guys have the interests of longs in mind?
Having said all this, either way, I hope the vote is close. Management needs to get the message to put more thought into what they do, even if their intentions are not nefarious.
AI
