Kingsmen Creatives

[fallscushion]

KINGSMEN CREATIVES 30 APRIL AGM – RESOLUTION’s 9, 10, 11 & 12: VOTE AGAINST

Kingsmen has issued its AR 2018 and AGM notice. I would like to kindly request that fellow Kingsmen shareholders carefully consider how they will vote on four key resolutions at the forthcoming 30th April AGM. Specifically, I respectfully suggest that Kingsmen shareholders carefully consider their position with respect to Resolution No’s 9, 10, 11 and 12; resolutions, which if passed, would allow Kingsmen to continue granting ‘Performance Shares’ to its Management and to its Board Members.

I will vote AGAINST for all four of these resolutions. My rationale is as follows:
A. Kingsmen’s poor competitive performance over the last five years. Four years ago, Pico’s market-cap was three times Kingsmen’s; today Pico is almost six times larger. Kingsmen’s EPS is 54% less than where it was five years ago,; Pico’s EPS has increased 13% over the same period. And dividend level comparisons reflect unfavourably on Kingsmen, where borrowings have increased more than five-fold over the last five years.
B. The ten most senior Kingsmen employees received a total of SGD 5.1 Mln remuneration in 2018 – this in a Company that delivered SGD 8.1 Mln NIAT and fails to compete effectively.
C. Under its ‘Performance Share Scheme’, the passing of AGM resolutions has resulted in the same quantum of Performance Shares granted to Messrs Ong, Ong & Soh in each of the last five years despite marked reductions in EPS and dividend levels, loss of market share etc. Actual Performance appears not to have been a driver in determining the quantum of ‘Performance shares’ granted and there appears little if any alignment between shareholder aspirations and financial rewards for Kingsmen’s management.
D. Kingsmen has allowed itself to be disrupted by e.g. Cityneon and others. Kingsmen’s Senior Management and moreover its Board must accept accountability for erosion of the Company’s competitiveness and its strategic malaise.

These four resolutions provide the best AGM opportunity for shareholders to register their concern because Performance Share recipients, i.e. including substantial shareholders and Board Members, are specifically barred from voting on such resolutions. At last year’s AGM, these resolutions were passed ~6.6 Mln (70%) to ~2.8 Mln (30%), implying a rising groundswell of shareholder angst. Voting AGAINST all four of these resolutions gives an opportunity to convey a clear message to the Board. If the resolutions pass but votes against exceed say 5 Mln, I believe the message cannot be ignored.

I ask that you join me in voting AGAINST all four of these AGM resolutions. My mission here is for  Kingsmen’s leadership to reenergise around delivering a much enhanced competitive performance rather than persist with an unhealthy pre-occupation on delivering unmerited remuneration packages to themselves – I would like to pursue this cause respectfully but pointedly.

I thank VB forummers for their time and their kind consideration – I would welcome your views.

And so shall I.