Bear with us
The rubber meets the road in proxy materials for listed companies north of the equator. The trend, were it to be called one, is for compensation of executives and boards to be linked to the increase in the share price of the company. This is not news and in theory aligns the interests of stakeholders and management.
Not to pick on the first in but to pick on the first in Gilead Life Science executives receive between 20-40 % of their annual compensation from a base salary and bonus tied to the operating performance of the company or the reality of revenue, margins, cash flow, planning an investing for the future.
The rest from grants of stock, restricted stock, tracking stocks, stock options, and other forms of creative derivatives. The premise is that operating performance, increased earnings per share, will be rewarded with an increased share price into which the equity-linked compensation will multiply with the magic of the multiple (the willingness of market actors to pay for trees that grow to the sky).
To help since the Lehman moment (2008) companies borrowed larger amounts of cheaper money and bought their own shares. The buyback desks in the last five years have writ large accounted for the net demand for stock prices and revenue for intermediaries.
Think the Blackstone of today that reminds us there is a free lunch.
It will receive at least $15 million in fees for helping the Fed decide which of its own corporate bond funds to buy and Blackstone has clearly said it will trade ahead of these orders: buying for its own account from the market and marking it up to sell to the Fed for which it is being paid by the Fed to do. This could be how Milo Minderbinder sold five-dollar eggs for three dollars and made money. He did not pay for the eggs. There is a term for the practice of this elevated corporate finance by Blackstone, frontrunning, and in the old days was an indictable offense remedied by the suspension of liberties.
But we digress.
Gilead Lifesciences announced that it providing a non-exclusive license for the manufacture of a drug that at best is slightly better at accelerating recovery from COVID 19 than doing nothing, 15 days from 11 days. And that the license will be good only until a real vaccine is discovered which lead an MIT professor to observe that it is not only the active ingredient but the additives, analysis, quality control, scale of manufacturing, and anticipation of variations that counts. Gilead provides the grand caveat that raw materials are scarce and a ripple in the supply chain of any of the parts can do more harm than good.
So, then, a glance for an inquiring mind of the knowns (numbers in billions). The Licensor (Gilead) with 12,000 employees generating revenue of $200,000 each valued by the market at $800,000 each is handing off the heavy lifting to an outfit that has a market value of 1/97th its size with 2200 employees or one fifth its size plus others including a few in Pakistan where the countries and supply chains are locked and upside down.
That is the plan
Gilead Jubilant Life Sciences
market cap 97 1
revenue 23
income 5
pe 20 30
employees 12000 2200
The rubber meets the road in proxy materials for listed companies north of the equator. The trend, were it to be called one, is for compensation of executives and boards to be linked to the increase in the share price of the company. This is not news and in theory aligns the interests of stakeholders and management.
Not to pick on the first in but to pick on the first in Gilead Life Science executives receive between 20-40 % of their annual compensation from a base salary and bonus tied to the operating performance of the company or the reality of revenue, margins, cash flow, planning an investing for the future.
The rest from grants of stock, restricted stock, tracking stocks, stock options, and other forms of creative derivatives. The premise is that operating performance, increased earnings per share, will be rewarded with an increased share price into which the equity-linked compensation will multiply with the magic of the multiple (the willingness of market actors to pay for trees that grow to the sky).
To help since the Lehman moment (2008) companies borrowed larger amounts of cheaper money and bought their own shares. The buyback desks in the last five years have writ large accounted for the net demand for stock prices and revenue for intermediaries.
Think the Blackstone of today that reminds us there is a free lunch.
It will receive at least $15 million in fees for helping the Fed decide which of its own corporate bond funds to buy and Blackstone has clearly said it will trade ahead of these orders: buying for its own account from the market and marking it up to sell to the Fed for which it is being paid by the Fed to do. This could be how Milo Minderbinder sold five-dollar eggs for three dollars and made money. He did not pay for the eggs. There is a term for the practice of this elevated corporate finance by Blackstone, frontrunning, and in the old days was an indictable offense remedied by the suspension of liberties.
But we digress.
Gilead Lifesciences announced that it providing a non-exclusive license for the manufacture of a drug that at best is slightly better at accelerating recovery from COVID 19 than doing nothing, 15 days from 11 days. And that the license will be good only until a real vaccine is discovered which lead an MIT professor to observe that it is not only the active ingredient but the additives, analysis, quality control, scale of manufacturing, and anticipation of variations that counts. Gilead provides the grand caveat that raw materials are scarce and a ripple in the supply chain of any of the parts can do more harm than good.
So, then, a glance for an inquiring mind of the knowns (numbers in billions). The Licensor (Gilead) with 12,000 employees generating revenue of $200,000 each valued by the market at $800,000 each is handing off the heavy lifting to an outfit that has a market value of 1/97th its size with 2200 employees or one fifth its size plus others including a few in Pakistan where the countries and supply chains are locked and upside down.
That is the plan
Gilead Jubilant Life Sciences
market cap 97 1
revenue 23
income 5
pe 20 30
employees 12000 2200
the Gilead CEO pitching the plan to The Chief or talking about handicaps
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