Standing down executive directors at one of Wales' leading life sciences sector firms, EKF Diagnostics , are getting final cash bonuses of £2m in recognition of significant shareholder value created over the last five years.
The remuneration committee of Alternative Investment Market listed EKF Diagnostics, which has its HQ in Penarth, has agreed £2m bonuses to chief executive Julian Baines, who will stand down in October, and chief operating officer and finance director, Richard Evans, who will stand down in June, 2022.
The incentive executive bonus scheme for the global point-of-care diagnostics company was previously based on an exit through an acquisition by a third party.
However, the board have approved it now being assessed against shareholder value created.
The total performance in EKF's share price since the inception of the incentive scheme (set up in June 2016) represents a gain of 56.45p per share. Moreover, further value created from EKF's relationship with US-based Mount Sinai Innovation Partners is equivalent to 54.85p per EKF share.
The latter has seen a number of successful spinout firms from EKF including Verici and Renalytix.
Last year, buoyed in part by the manufacturing Covid 19 sample collection tests, EKF posted record turnover and profits.
It recently upgraded expectations for 2021 with its core business trading strongly and securing a multi-million dollar contract expansion for the supply of sample collection devices to a large multinational customer.
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EKF said the total payments made under the incentive arrangement to the executive directors, represents "a modest" 1.88p per EKF share, based on the current shares in issue, or less than 2% of the total value created.
As of 31 December 2020, the company had net cash of approximately £21.4m. EKF has a market capitalisation of more than £300m.
In an update to the City, EKF said its non-executive directors, having consulted with N+1 Singer as the company's nominated adviser, consider the terms of the bonus to be "fair and reasonable in so far as shareholders are concerned."
Penarth-born Mr Baines acquired EKF Diagnostics in 2010 through a reverse takeover onto AIM.
Mr Baines, who lives in Penarth, insisted that the HQ was based in his home town. Over the last decade EKF has become one of Wales' best business success stories.
He will be succeeded as chief executive by Swansea-born Mike Salter, the current head of EKF's US operations.
Swansea-born Mr Salter has 35 years of experience in the life science and diagnostics Industry, 33 of which were spent with GE and Amersham in a variety of positions in the 海角视频, Canada and USA. He joined EKF in 2017.
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Mr Baines will remain involved with the global diagnostics firms as a non-executive deputy chairman. In his new role, he will focus on delivering further value from the company’s relationship with Mount Sinai Innovation Partners.
EKF has also confirmed that Chris Rigg will join the board as a non executive director in July with Adam Reynolds standing down from the board after more than a decade.
Mr Rigg is currently chief executive of Mandata Holdings and a non-executive director of Sportech plc.
Chairman of EKF, Christopher Mills, said: “We are grateful to Julian for his execution as CEO and also pleased that he will continue to serve on the board to help progress additional opportunities through our relationship with MSIP, which has delivered superior returns to shareholders over and above that delivered by the EKF business itself.
“In Mike Salter we have a very strong successor to step into the CEO role, as he has been pivotal to our success in the US and holds key relationships there and internationally to support the implementation of our growth strategy, ‘EKF 2024’.
“Similar thanks must go to Richard Evans for his many years of service alongside Julian, and we are grateful for his time between now and his stepping down next May to ensure continuity, support for the new CEO and his own successor in due course.
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“Finally we also thank Adam Reynolds for his contribution since 2009, and look forward to welcoming Chris Rigg in the summer. Chris will make a strong impact given his track record and the strategic, financial and operational skillset he brings.
“Overall this is a very exciting time for EKF and both the growth plan and board evolution have many merits. We look forward to working together on this next phase of our growth."