The chief executive officer of research and development company Wellfully (ASX: WFL) has taken a 50% pay cut amid pressure from shareholders, questionable financials and a declining share price to historic lows.
If the name hasn’t hinted at it yet, Wellfully is a wellness company involved with the science of magnets and adopting them into skincare beauty products. The Company focuses on research and development, and promotes its advancements via its subsidiaries, Rėduit and Swisswell.
Paul Peros has been at the Company’s helm since April 2020, when he was initiated with a base remuneration pay of EUR €360,000 (A$550,000) per annum. Mr Peros used to head a beauty-focused company called FEROS, where he gained over 20 years of experience in the pharma and beauty industries which he intended to implement as the chief of Wellfully.
It’s not often you see this. Watching a CEO take a pay cut would make any spectator or investor raise their eyebrows. But in doing something so seemingly rare and selfless, Mr Peros isn’t quite the legend you’re looking for, as the pay cut was instated on the basis he instead receives Performance Rights incentives equalling 15 million shares or $3 million over three years.
The rights will be issued to Mr Peros over the coming three years in a series of three tranches. Each tranche represents different share price milestones that increase by 5 cents, totalling 5 million additional shares each at each tranche. The first tranche, representing 10 cents, would have to be achieved for Mr Peros to receive the first portion of the benefits. If the third tranche of 20 cents is reached (which is an 800% increase from today’s share price of 2.2 cents), he would receive the full $3 million award.
Now, although he has bargained for benefits for his hard work, the salary package reduction comes after the Company went through a complete Debt restructuring and Capital Raise in October 2022 to provide the working capital to maintain operations after reviewing the financials over the previous fiscal year.
The capital raise placement was offered to sophisticated and professional investors from CPS Capital, where Wellfully intends to raise $2.3 million.
Noted in its annual report on 3 October 2022, the Company highlighted doubled revenue year-over-year of $2.6 million. However, cash outflows topped $8.25 million, with its largest expenses being for directors and employee benefits. The Company also recorded net loss after tax and income of $7.3 million, finishing the period with only $317k in cash and cash equivalents.
WFL shares have declined 90% over the last two years since August 2020 from $0.25 down to today’s current price of $0.022.
Clearly, it’s not that easy to run an ASX-listed company.
Trading Desk Assistant at Emerald Financial
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