The five executive directors of A&D Pharma, a company with a 566 million-euro capitalisation on the London Stock Exchange, are set to receive 2.5 million euros in shares if the targets to increase operating income and stock market performance are met.
The executive directors already own 40 million euros worth of shares in A&D Pharma and will get a total of 146,000 GDRs as part of a plan approved by shareholders in three years' time (subject to their continued employment in the company). A&D Pharma comprises the Sensiblu drugstore network and the Mediplus pharmaceuticals distributor.
According to the company's announcement on the London Stock Exchange, 50% of this award will depend on EBITDA growth targets being met and 50% will be subject to the comparative total shareholder return performance of the company against a selected comparator group of companies. If the executive directors leave before this date, they will no longer be allowed to exercise their share option.
"The system is flexible and open, and is a good model to ensure loyalty. You can have managers who leave before the three-year term and then lose these rights," said Dragos Dinu, A&D Pharma CEO.
Prior to last year's listing on the London Stock Exchange, Dragos Dinu (CEO), Florin Buligoanea (the then chief financial officer, who resigned and was replaced by Roger de Bazelaire), Vivian Diaconescu and Claudiu Opran all received 7% in the company - worth 40 million euros in total.
Floatation on the London Stock Exchange prevented the sale of new shares of those who were shareholders prior to the operation for one year, which will expire at the end of this month. The shareholders have recently approved floatation on a new capital market.
"We have not made a decision yet about where to float or who will handle it," Dragos Dinu said. At present, he owns 2.23% in A&D Pharma- a stake worth 13 million euros.
The majority shareholder of A&D Pharma is investment vehicle Sograno BV, which is registered in the Netherlands. Sograno BV is indirectly held by Smooth Winds Ltd, Future Sun Holdings, Breezi Carm Holdings Inc. and Wynding Investments Inc, which are all registered in the Virgin Islands. They are controlled by businessmen Walid Abboud, Michel Eid, Ludovic Robert and Roger Akoury, who started the business on the Romanian market ten years ago.
The pharmaceutical group, which comprises pharmaceutical distributor Mediplus and Sensiblu drugstore chain, is considering expansion outside Romania, and has strengthened its team to devise an international expansion plan. The company is now probing the neighbouring markets (Ukraine, Bulgaria, Slovenia, Macedonia, Croatia, Serbia and Montenegro) but has not revealed a target for the time being. Elantis Farm, a joint venture in Moldova, remains the only foreign presence in the group.
A&D Pharma posted 199.1 million euro turnover in the first half of this year, up 35% on the same time in 2006.
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