I would love to be an employee of SP Setia, if I can get a job there but if I am an investor (which I am) I may think again. Why?
Well, I leave it late to comment on this but the full proposal came yesterday, and here it is. It is basically a free share award (up to 15%) for the employees which also includes the directors of course. The keywords are "no consideration" and "in recognition of loyalty". If you are to buy loyalty, and that affects the shareholders - then forget about loyalty!
I am not against rewards at all, but reward in a proper manner - cash and remunerations in other forms.
Here are the impact to the shares...According to its current price of RM3.13, the impact can go to as high as RM1.15 billion in value over 4 years - for a property company which is usually heavy with assets? Hello, it is not a services company such as IT, investment banks, pharma research etc...For a property company, land assets, market conditions presides over others. The 15% is on top of salaries and other expenses - fyi! Even for a top investment bank like Goldman Sachs, you know how much investors would jump over a 15% free share award over 4 years? The CEO of Goldman would not dare to come out with a plan like this even...You know when Steve Jobs proposed an option scheme for himself back in 2001 without the approval of the board, the media had a field day when the news appeared in 2006 - that was options, not free shares and it was way below 1% of total Apple's shares - for SP Setia, a property developer, not an Apple - total 15%!
What about its reasoning for the issuance? One of it is to provide valuable incentive to Employees without adversely affecting cashflow.
If TSL can think that SP Setia is him and he is SP Setia, then that's really wrong!