Hughes’ and Bailey’s $6m Photon payments don’t tell the whole story
As we reported earlier today, Tim Hughes has departed Photon Group’s board, not long after relinquishing the chairmanship.
The move comes as the company continues its fight for survival through a recapitalisation.
Those who have been following the story will be aware that CEO Matt Bailey departed the scene shortly before the mess exploded into the public domain.
Photon Group’s annual reports are easily available. An interesting disclosure is how much both of them were paid. The numbers below do not take into account the large number of shares each received.
Directors’ and executive officers’ cash and post‑employment and other long term remuneration – (Company and consolidated):
Tim Hughes:
- 2010 – not yet disclosed
- 2009 – $1,078,745
- 2008 – $578,129
- 2007 – $212,686
- 2006 – $162,139
- 2005 – $161,585
- 2004 – $81,125
Total = $2,112,270
Matt Bailey
- 2010 – not yet disclosed
- 2009 – $1,110,807
- 2008 – $899,251
- 2007 – $659,748
- 2006 – $556471
- 2005 – $456,870
- 2004 – $107,912
Total = $3,791,059
That might look like a lot to most of us, including anyone who has lost their job at a Photon Group company in recent months. But one thing that stands out is that by my read, Hughes’ cash salary was relatively modest by ASX executive chairman standards, and he took most of his remuneration as shares. Bailey was rather more convenonally rewarded.
That suggests to me that foolish as it may have been, Hughes genuinely believed in the company’s structure and did not expect things to end up where they are, which is likely to see the value of his current shareholding wiped out by the fundraising.
As the Sydney Morning Herald reported, Bailey and his mother sold most of their shares in Photon Group just before things went south, for about $5m. As the paper puts it: “talk about lucky timing”.
Arguably though, Hughes is another victim of this mess.
Tim Burrowes
Tim, your point may be valid, however the business strategy of Photon has been continuous aquisition to increase the total value of the business and its share price. This removes the need to focus on improving the efficiency of its component parts and when expansion stops, exposes the underlying flaws of that particular model.
Mr Hughes maximising his personal exposure to that leverage opportunity is a logical extension of that strategy.
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As a former Photon employee, I’d suggest that Hughes has merely fallen victim to his own narcissistic tendencies.
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It also looks like there’s a strong correlation between the slide of the shares and the rise of their salaries. Doesn’t look like their confidence lasted too long.
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It’s easy to be cynical about this mess but no one wants to see Photon fail.
Would you rather see WPP and others pick off the best bits and leave the financial mess in the hands of shareholders and creditors?
A lot of suppliers are hurting already and I hear even the best Photon businesses have cash freezes.
Having worked at Photon and been witness to people with overbearing personalities hiding their lack of deeper thought I hope that JP gets this through.
Some of my friends still work there.
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As an employee within one of Photon’s larger companies…there is pressure already. There is a tension and a feeling that they’ll be cuts…what choice do they have? Its not sustainable as it is…
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the real story of greed is only told when you hark back to the float and see how much ‘carry’ or free equity was granted to Tim Hughes, Siiimon and one other whose name currently escapes me. I recall that it was in the vicinity of $8m a piece but could be wrong
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“Hughes is another victim of this mess”???? LOL. He was paid a small fortune to completely F#### it up. He has smashed Photon’s shareholders value, created agro and uncertainty for the people who sold them their businesses in good faith, destroyed jobs. Where’s the rope?
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You can never find enough rope for those guys. I want to know when ASIC or someone else is going to come in and ask the old CEO why he left and sold all his shares before all this happened. Surely thats some sort of inside knowledge. He leaves, probably gets a payout and gets a nice $5m for his shares before ours become worthless. To say these aren’t linked is hypocrisy. Where is the regulator??????
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Tim Hughes was earning enough to fund a stable of racehorses and that takes more than chickenfeed. Ironic that his runner yesterday RECOUP DE FORTUNE, didn’t! Karma, I call it.
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The only victims are the investors, shareholders and employees. Matt although a good bloke was out of his depth, Tim was in an industry he knew nothing about and Matt appointed his inexperienced brother to run a business division. A tonne (edited by Mumbrella for legal reasons) that anyone who knows how to operate a calculator could discover. Matt and his brother would have also made a tidy sum on selling his business to Photon and the value in that business should have a big question mark over it. The only amusing story i can tell you all is that at the Photon christmas party Matt stood on stage with Tim hughes and said including dropping the f bomb. “they told us we couldnt do it and we f***in have”
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