On 7 March 2016, 3,243,149 approved options were granted to qualifying staff under the Company's new EMI Share Option Plan. The exercise price for those options granted is 28.125 pence, which is equal to the Company's mid-market closing price as at the 4 March 2016, being the latest practicable date prior to the grant of these options. The share options will vest in the event that the Company's share price averages at least 40 pence over any period of 20 consecutive working days within a 36 month period beginning on 7 March 2016. Once vested, the share options can be exercised at any time up to and including 6 March 2019. If the Fulcrum Utility Services Limited share price does not average at least 40 pence over any period of 20 consecutive working days within the 36 month period, the share options will lapse.
I thought at the time it was hardly a stretch target, but it barely a month since the award of options and we are nearly there.
I'm really not sure about this company, I half expect it to sit at 40p for the required number of days and then drop back. Any other thoughts?
A few basic numbers. 156m shares in issue so this 3.2m share scheme represents about 2% of the company with a market cap at 40p option exercise price of about £55m so say £2.1m for achieving 50% share price growth/market cap of say £20m, maintained for 20 days, i.e. about 10% of the upside. (Apologies if the maths is off, doing in my head without a calculator). Not sure how thinly the jam is spread - is it just CEO and FD or wider net of employees, hopefully the latter? - but at first blush this doesn't look excessive compared to some of the schemes around.
I can see why hitting the target so quickly might leave a bit of a smell, did they have an inside track on news etc., driving up the share price? Just about OK in my view provided they don't come back asking for the same again within the 3 year period of the original scheme (although I suspect they will).
Gus.
