Paragon Technologies calls level of Ocean Power board compensation ‘egregious’

Paragon Technologies owns approximately 4.0% of the outstanding shares of Ocean Power Technologies. Paragon said, “On July 11, OPT issued a response to Paragon’s public letter released that morning. Yet again, rather than respond to the alarming and factual statements Paragon has made regarding OPT’s historic financial losses and rapidly degrading balance sheet, management and the Board continue to paint lipstick on OPT’s business.On July 12, OPT announced its Fiscal 2023 results. In announcing the highlights for the year, CEO Philipp Stratmann touts the ‘best year of revenue generation since fiscal 2015’ and ‘positive gross margin for the first time since fiscal 2016.’ What management FAILED to even mention or explain is the $28 million in annual expenses, up almost 35% year over year. Management failed to talk or explain the $26 million net loss in fiscal 2023, up almost 40% year over year. OPT recently told shareholders that its ‘Board is actively engaged in overseeing management’s execution of the Company’s strategy and is comprised of six highly qualified directors, five of whom have been appointed in the last three years.’…OPT’s newly refreshed Board and CEO have indeed delivered for shareholders – delivered a disastrous record. In the past three years, nearly $50 million in cash has been burned to achieve: Record losses of almost $60 million; Less than $6 million in total revenues; Despite the staggering and unjustifiable destruction of OPT shareholder value, the Board has seen itself fit to reward itself in a manner that we believe is self-serving and detrimental to shareholders while the business strategy bleeds OPT dry…In Fiscal 2018, total board and NEO compensation was 390% – nearly four times – of OPT sales. In Fiscal 2019, total such compensation was 260% of sales. OPT has compensated its directors and named executive officers more money than the company is generating in total sales! The level of Board compensation is egregious and an insult to shareholders in the worst possible way. Sadly shareholders should not be surprised as this Board appears to believe it is entitled to do what it wishes with the Company’s assets as it touts the purported amazing progress the Company has made. Paragon hereby demands that OPT’s directors return all excessive Board compensation to the Company over the past ten years since the present Chairman Terence Cryan has been on the Board.Recent precedent has come down in favor of shareholders when Board compensation has been excessive as evidenced by the recent return of $735 million in board compensation from Tesla board members. Paragon believes that OPT’s Board has violated the most fundamental fiduciary obligation that directors are required to uphold, its duty of care in doing what is in the best interests of shareholders. On behalf of all shareholders, Paragon intends to hold the Board accountable to the fullest extent of the law.”