Some here have raised concern about the recent compensation for the executive team. Let’s break down exactly what they are receiving. The compensation is tailored to each exec, but let’s look at Lalezari and Hoffman, who are receiving the largest compensation.
Each received options (right to buy at .28) for 4,874,691 shares. Approximately one quarter of the shares (1,218,674) vest on 03/20/2027. The rest vest over a three year period starting in April 2027 at about 100k per month.
So from this funding, neither receives anything until one year from now. Plus, if the share price stays below .28, as 123kidc says, the options aren’t worth cashing in. So the incentive is there for them to get the share price as high as they can.
Let’s say the share price goes to .40 by April 2027. (I know a lot of us would be very disappointed with that number.) Their compensation would be $144k each ((.40-.28)x1.2M). Perhaps mediocre pay for mediocre results. But let’s say instead maybe through diligence, hard work and great results, the share price rises to 2.00 by April 2027. By exercising their options, they will net approximately $2.064M each ((2.00-.28)x1.2M). Interesting that if you were to buy 1.2M shares tomorrow at .26, you would net $2.088M ((2.00-.26)x1.2M, slightly more than L and H. Of course, you would placing your money at risk.
This compensation plan is probably a yearly plan. Not sure what was done in the past, but I’m sure something similar will be issued a year from now. It’s the way they can retain the execs without having to deplete the little cash they have.
What happens if the company is bought out? The exec team would be holding options that have yet to vest. I imagine there would be negotiations that would address this. Perhaps someone familiar with buyouts can elaborate.
There are other execs with smaller allocations that vest monthly starting next month. Again, these only have value if the share price rises above .28. I think that’s incentive enough to motivate the whole executive team to do what it takes to get the share price up. I believe they have a step by step plan. Unfortunately, these steps feel agonizingly slow.
So the net effect of the granting of the options is dilution as a result of a slight increase in share count, but it’s a small price to pay to keep the company afloat and retain the executive team
Each received options (right to buy at .28) for 4,874,691 shares. Approximately one quarter of the shares (1,218,674) vest on 03/20/2027. The rest vest over a three year period starting in April 2027 at about 100k per month.
So from this funding, neither receives anything until one year from now. Plus, if the share price stays below .28, as 123kidc says, the options aren’t worth cashing in. So the incentive is there for them to get the share price as high as they can.
Let’s say the share price goes to .40 by April 2027. (I know a lot of us would be very disappointed with that number.) Their compensation would be $144k each ((.40-.28)x1.2M). Perhaps mediocre pay for mediocre results. But let’s say instead maybe through diligence, hard work and great results, the share price rises to 2.00 by April 2027. By exercising their options, they will net approximately $2.064M each ((2.00-.28)x1.2M). Interesting that if you were to buy 1.2M shares tomorrow at .26, you would net $2.088M ((2.00-.26)x1.2M, slightly more than L and H. Of course, you would placing your money at risk.
This compensation plan is probably a yearly plan. Not sure what was done in the past, but I’m sure something similar will be issued a year from now. It’s the way they can retain the execs without having to deplete the little cash they have.
What happens if the company is bought out? The exec team would be holding options that have yet to vest. I imagine there would be negotiations that would address this. Perhaps someone familiar with buyouts can elaborate.
There are other execs with smaller allocations that vest monthly starting next month. Again, these only have value if the share price rises above .28. I think that’s incentive enough to motivate the whole executive team to do what it takes to get the share price up. I believe they have a step by step plan. Unfortunately, these steps feel agonizingly slow.
So the net effect of the granting of the options is dilution as a result of a slight increase in share count, but it’s a small price to pay to keep the company afloat and retain the executive team
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