{
  "docId": "019dd923-622c-750b-8b95-a87005b884b8",
  "docSlug": "4cc7dff78d8c",
  "documentTitle": "Dye & Durham Limited (DND)",
  "authorId": "27_Engine_Capital",
  "authorName": "Arnaud Ajdler",
  "documentKindSlug": "activist-deck",
  "documentKindLabel": "Activist deck",
  "sourceTypeSlug": "activist_investor",
  "sourceTypeLabel": "Activist investor",
  "presentationDate": "2024-12-01 00:00:00",
  "orientation": "landscape",
  "aspectRatio": 1.7778431,
  "pageNumber": 85,
  "pageCount": 112,
  "prevPage": 84,
  "nextPage": 86,
  "slideType": "expose_contradiction",
  "function": "expose_contradiction",
  "density": "overcrowded",
  "nDataPoints": 10,
  "notes": "The slide highlights a contradiction between the CEO's claim of not owning common shares and the existence of Plantro as a large shareholder.",
  "elementsJson": [
    "headline_text",
    "paragraph",
    "bullet_list",
    "data_table",
    "footnote"
  ],
  "metadataConfidence": 1,
  "imagePath": null,
  "slideHref": "/slides/019dd923-622c-750b-8b95-a87005b884b8/85",
  "deckHref": "/decks/019dd923-622c-750b-8b95-a87005b884b8",
  "deckJsonHref": "/decks/019dd923-622c-750b-8b95-a87005b884b8.json",
  "deckAnchorHref": "/decks/019dd923-622c-750b-8b95-a87005b884b8#slide-85",
  "components": [
    {
      "bbox": null,
      "kind": "callout",
      "text": "We believe this poorly designed compensation package encourages the CEO to take excessive risks such as making acquisitions using significant leverage in the hope of reaching these targets.",
      "attrs": null,
      "subkind": null,
      "toolName": "Visual emphasis",
      "toolSlug": "visual-emphasis",
      "confidence": null,
      "componentId": "019dd953-0396-73da-b901-cb658815a8e8",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.06,
        "w": 0.92,
        "x": 0.04,
        "y": 0.21
      },
      "kind": "list",
      "text": "In October 2021, the Board granted 6,851,100 stock options to Mr. Proud, representing 10% of the then-outstanding shares. The strike price of those options is $39.38 per share (this followed an earlier grant of 2,336,793 options in November 2020 at a strike price of $21.308 per share.)",
      "attrs": null,
      "subkind": "bullet",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "01c4b3ce-a73d-4a58-afc2-1f4432c62e32",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.05,
        "w": 0.92,
        "x": 0.04,
        "y": 0.745
      },
      "kind": "list",
      "text": "One of the reasons for this outsized grant was that “the Global CEO does not own any common shares of the Company.” This seems a rather unusual statement since Plantro (Mr. Proud’s investment vehicle) was still a large shareholder of the Company.",
      "attrs": null,
      "subkind": "bullet",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "a2170c95-df79-4892-a492-07a60587395e",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.08,
        "w": 0.92,
        "x": 0.04,
        "y": 0.29
      },
      "kind": "list",
      "text": "70% of those shares would vest at much higher share prices ranging from $60 to $120 per share. We believe this poorly designed compensation package encourages the CEO to take excessive risks such as making acquisitions using significant leverage in the hope of reaching these targets. 30% of these options would vest upon the achievement of corporate milestones, which the Board has not disclosed.",
      "attrs": null,
      "subkind": "bullet",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "d7bdcfe0-b130-4814-b434-9fb5e8398b35",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": null,
      "kind": "metric",
      "text": "option vesting price: $120",
      "attrs": null,
      "subkind": "primary",
      "toolName": "Quantification",
      "toolSlug": "quantification",
      "confidence": null,
      "componentId": "019dd953-0396-73da-b901-d20fc4ea22ac",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.06,
        "w": 0.92,
        "x": 0.04,
        "y": 0.14
      },
      "kind": "paragraph",
      "text": "The CEO's 2021 large option package was too high and, more importantly, incentivizes Mr. Proud to take excessive risks. Since the stock price is now significantly below the strike price of those options, this package offers little retention value and pushes Mr. Proud to take even more risks",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "0d2ad768-5747-4078-a810-d336ef9a4f0e",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": null,
      "kind": "quote",
      "text": "“the Global CEO does not own any common shares of the Company.” — Company filings.",
      "attrs": null,
      "subkind": null,
      "toolName": "Authority citation",
      "toolSlug": "authority-citation",
      "confidence": null,
      "componentId": "019dd953-0396-73da-b901-cc666f620d10",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.02,
        "w": 0.4,
        "x": 0.24,
        "y": 0.695
      },
      "kind": "source-note",
      "text": "(1) Not disclosed by the Company given the commercially sensitive nature of such options.",
      "attrs": null,
      "subkind": null,
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "3f522ba5-7079-4be9-aa8b-c8b967f9d4fe",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.15,
        "w": 0.516,
        "x": 0.242,
        "y": 0.435
      },
      "kind": "table",
      "text": "October 2021 Options (%) Vesting Date 17.5% The date on which the 20-day volume weighted average closing price equals or exceeds $60 17.5% The date on which the 20-day volume weighted average closing price equals or exceeds $80 17.5% The date on which the 20-day volume weighted average closing price equals or exceeds $100 17.5% The date on which the 20-day volume weighted average closing price equals or exceeds $120 30% Upon the achievement of certain strategic goals and corporate milestones(1)",
      "attrs": null,
      "subkind": "data",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "6f968703-45a0-454e-adca-2a416a2f6252",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.03,
        "w": 0.6,
        "x": 0.04,
        "y": 0.09
      },
      "kind": "title",
      "text": "The Board Has Failed to Appropriately Incentivize and Compensate Management",
      "attrs": null,
      "subkind": "headline",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "ec36ead4-3947-4375-9e16-535fa9d126b2",
      "frameworkName": null,
      "frameworkSlug": null
    }
  ],
  "metrics": [],
  "tools": [],
  "frameworks": [],
  "arcBeats": [],
  "loops": [],
  "imagePathAlt": null,
  "thumbSrc": null,
  "thumbSrcAlt": null,
  "locked": true
}