Steve Mabb, chair of the ASA spoke about his correspondence with EML in 2020 on a recent episode of Shares for Beginners. EML were a new entrant to the ASX200 and weren't being monitored by the ASA at the time; however, Steve held shares and wanted to start monitoring the company.

He met with the board, dived into the annual report & worked through what they were proposing. The board had chosen to use discretion to pay out most of the management bonuses that year. This was despite not hitting their targets. The board blamed Covid saying it wasn’t in management’s control and they worked really hard. Keep in mind shareholders were down 40% by no fault of their own either.

During the AGM the chair responded that not only had they used discretion that year to pay out bonuses that because they’re in a competitive environment for staff they’ll be happy to use discretion again in the future. In other words the incentive plan isn’t hard & fast and they’ll use discretion as they see fit.

According to Steve, in the same meeting some investors challenged the company on how difficult or challenging it was to understand some of EMLs products and services. The CEO's response to those investors was that they don’t need to understand our products they just need to determine whether they trust management and if you trust management then you should invest in EML

A few months later they were in trouble around an acquisition in Ireland

The EML chat starts at 22:55

https://www.sharesforbeginners.com/blog/mabbasa