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Post by rockstarrick on Aug 1, 2019 20:24:13 GMT -5
I believe this is at least the second time this type of purchase has been discussed. Maybe 6 months, maybe a year, this same thing happened, and I believe 5 thousand shares was the maximum that they could purchase, under this plan. Could be right, could be wrong I'm just the Bass Player šøš
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Post by ktim on Aug 2, 2019 15:05:00 GMT -5
My view on MC's compensation, both salary and options, is that these were negotiated with the Board of Directors, and approved by shareholders. If you want to bash his compensation, some of that bashing has to be spread around, and I would still question whether it was fair. I can understand people being dissatisfied with performance, but in regard to compensation is what Dr. Castagna earning as a CEO of a small biopharma completely out of touch with what similar people in similar roles are earning? As for the purchase, I agree, $5K isn't much and it would help if he's going to make a purchase that he make it be larger. I feel bad saying that, but as an officer and principal of the company insider trades carry a lot of public weight and should be made with that in mind. In general, yes, this management team is receiving more compensation than typical for a small pharma burning this much cash due to slow sales. Yes, blame should be shared by management, the board and those shareholders that don't vote.
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Post by prcgorman2 on Aug 2, 2019 17:27:55 GMT -5
What is the reference for concluding compensation is too high? I know there are organizations who study and rate such things but I donāt have access to those materials.
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Post by mnholdem on Aug 2, 2019 17:35:30 GMT -5
Conventional wisdom these days is you need to pay big to attract top talent. So far the CEO/BoD has the first part down pat.
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Post by buyitonsale on Aug 2, 2019 21:56:41 GMT -5
Reality says CEO and BOD are in control until market cap is 4B and Mann group gets to convert their loan at $4 per share in a few years.... I believe they will do very well.
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Post by matt on Aug 3, 2019 9:59:09 GMT -5
What is the reference for concluding compensation is too high? I know there are organizations who study and rate such things but I donāt have access to those materials. The gold standard in pharma and biotech is the Radford Survey, compiled by a subsidiary of Aon. Radford compiles the compensation practices of nearly 1,000 pharma and biotech companies rating every job from the CEO down to the janitors that sweep the floor at night. The results are stratified by sales, number of employees, and other metrics and report on all forms of compensation including base, bonus, stock options, restricted stock, and other perqs such as company cars or club memberships. For each job the compensation is shown for the 10th, 25th, 40th, 50th, 60th, 75th and 90th percentiles (as I recall). Each company has to have a philosophy, are they going to pay at the low end and tolerate a lot of executive turnover or are they going to pay up for stability. Some will offer meager base salaries but compensate with huge option packages while others give more cash compensation and less in stock. There is no perfect answer, but once adopted it is better for the company to remain consistent in their approach over time. Also don't look at summary numbers in SEC reports as they often do not reflect reality. Options, for example, are reported based on their theoretical value and not whether the executive has achieved any value at all. An executive might look like they make $1 million a year in an SEC report, but in reality they only earn $300K because the options are underwater. Similarly, if a multi-year award vests in 2020 then compensation for that year might look outrageous in comparison to the numbers for 2019 and 2021, but that is how the SEC requires it to be reported. All that said, MNKD does have some compensation packages that are well-above average for a company this size, and others that approximate the industry averages. Presumably the compensation committee has benchmarked MNKD against 5-10 similar companies, but the committee may need to revisit the benchmarks and pick a different set of comparables going forward.
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Post by prcgorman2 on Aug 3, 2019 11:22:56 GMT -5
Great post Matt but I still donāt know how you concluded āwell-above averageā in your final paragraph. Were you using information from the āgold standardā?
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Post by prcgorman2 on Aug 4, 2019 12:39:48 GMT -5
Matt, thanks to your helpful post I did a little digging and Schedule 14A filed by Mannkind in May indicates the Boardās Compensation Committee procedures do include using Radford Survey (if necessary), but that they relied on Mercer for their compettive compensation analysis. There is a lot of pretty detailed information in that filing about choices Mannkind makes in determining how best to compensate officers and executives but Iām not knowledgeable enough about this topic to know if those choices are good or bad. If there are things about Mercer or the choices outlined in the Schedule that allow you to conclude that Mannkind compensation is āwell-above averageā, I am curious to learn what those are.
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