I'm not a fan of retention agreements. The usual reason I cite is that they do not stand in the way of a superior outside offer and my earlier wire on Transpacific Industries illustrates this aspect. (VIEW LINK) Today's announcement from Evolution Mining illustrates another aspect: they can be used to boost remuneration outside the typical remuneration arrangements in place (fixed remuneration and variable remuneration). Evolution Mining has entered into a three-year retention arrangement with Jake Klein with the company to issue 3.75 million performance options to Klein and while today's announcement indicates these will be subject to the rules of the Employee Share Option and Performance Rights Plan, the only performance condition attached is continued employment to the date of vesting. Mr Klein and EVN have agreed to forego base remuneration increases or changes in the remuneration structure for the three years of the agreement...but with base of just over $1 million (including SGC super), STI opportunity of around 70% of base salary and annual LTI grants (1,397,197 rights approved at the 2015 AGM), this is just extra lolly.
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