The Australian Shareholders Association (ASA) has weighed into the controversy surrounding shares in Australian Wealth Management (AWM) and the company’s managing director, Andrew Barnes, in the run-up to its proposed merger with Select Managed Funds.

The ASA has recommended shareholders vote against two resolutions scheduled to be put to the AWM annual meeting next week and will be doing so for shareholders nominating ASA as their proxy. Those resolutions concern the granting of 2.2 million share options to Barnes as part of the company’s executive options plan and adoption of the company’s remuneration report for last year. AWM also announced on January 17 – two days prior to the proposed merger was announced – that 14 senior executives (unnamed) had been offered a total of 3.05 million share options at an exercise price of $1.48 a share. The share price jumped to more than $2 after the merger was announced. The proposed options for Barnes and the other executives were subject to performance hurdles, the company said. It also said that more information on the options announced on January 17 would be made available once the executives provided their acceptances. As previously reported, Barnes also purchased AWM shares on the market in January and December. He bought 25,000 shares on behalf of a family super fund on January 10, at $1.45 and 22,000 shares on December 7 at an average of $1.32 in his own name, according to filings with the ASX. The ASA met with senior management at AWM last week and sought the withdrawal of the resolution involving the remuneration report. The company declined, according to the ASA, but undertook to “give consideration to our representations in relation to certain aspects of it”. ASA said it was “highly dissatisfied with the lack of adequate information as to the terms and conditions intended to apply to the proposed options issue to the managing director …” The association will provide further guidance for shareholders prior to next week’s meeting, to be held at the Vibe Hotel at North Sydney at 10am on February 15. The merger is subject to approval by Select shareholders and the courts. Select will also issue an independent expert’s opinion on the value of the bid. It is an all-share bid which has the approval of both companies’ boards.

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