Difference between revisions of "Spera Bank February 2020 Executive Committee Meeting"

From Republic of Texas
(Issue 2: Resource Consignment)
(Issue 4: Developing a process for the 5 million unreleased shares)
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== Issue 4: Developing a process for the 5 million unreleased shares ==
 
== Issue 4: Developing a process for the 5 million unreleased shares ==
The February 2020 Executive Committee took up the task to develop a recommendation to be presented at the February 2020 Board Meeting to address the as-yet unresolved questions surrounding the 5 million unreleased shares in Spera. The understanding at the onset has been that in the event that the shares are subsequently released, they will ultimately dilute the existing ownership percentages.
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The February 2020 Executive Committee took up the task to develop a recommendation to be presented at the February 2020 Board Meeting to address the as-yet unresolved questions surrounding the 5 million unreleased shares in Spera. The understanding at the onset has been that in the event that the shares are subsequently released, they will ultimately dilute the existing ownership percentages. The Executive Committee arrived at the decision that we do not currently need the shares to be released, and some of us feel that those shares should never be released. Nevertheless, as a release could severely impact the Board and the Bank irrevocably, the final decision should be put to the Board as a whole. At the February 2020 Board Meeting, the full board will vote to adopt or reject the following process to permit the sale of the mentioned 5 million shares:
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=== Process to release 5 million shares ===
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Should this process be adopted by the Shareholders, it may not be amended except by meeting the participation and clearance standards set in this process (80% of shareholders must cast ballots, and 75% of the cast ballots must be to approve).
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# At least three individual shareholders petition the Chair to bring the matter to the Steering Committee
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# The Chair and Steering Committee unanimously agree that the Bank needs to sell the Shares. Should this succeed,
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# The Executive Committee unanimously agree that the Bank needs to sell the Shares. Should this succeed,
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# A special session must be called for the sole purpose of voting on this matter.
 +
# For the full board voting, 80% of individual shareholders must cast ballots. Should this happen,
 +
# 75% of the the cast ballots must be to approve the measure. Should this happen,
 +
# The Steering Committee must draw up a plan that they unanimously agree on. Once this happens,
 +
# The Executive Committee must unanimously agree to the plan. On failure, return to line 7. On success, proceed to line 9.
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# A special session must be called for the sole purpose of voting on this matter.
 +
# For a full board voting, 80% of individual shareholders must cast ballots. Should this happen,
 +
# 75% of the cast ballots must be to approve the measure. Should this happen,
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# The plan is enacted.
  
 
== Issue 5: Revising the Dividends process ==
 
== Issue 5: Revising the Dividends process ==

Revision as of 08:24, 11 February 2020

Second Executive Committee Binder

In January, we accomplished a lot that I'm very proud of. With wars raging outside our doors, Spera's Executive Committee stayed hard at work. We remained at the helm working on the myriad of tasks that we took up for our inaugural Executive Committee meeting. For February, I'd like to see us capitalize on our successes as a Bank and as Individuals.

When we ratified the First Executive Committee Binder, we ensured that there would be a new one each and every month to help steer and focus our efforts. To that end, I offer this proposal for us to take the following events up.

Issues

There are, before us, five issues that need to be addressed in preparation for the February 2020 Board Meeting. Additional issues may be raised and included in the binder throughout the session, however these are the five core points that we will endeavor to resolve. The goal is to not have any carry-over issues this term. Separate from these Executive Committee issues, the Steering Committee will be working with each of the Executives that currently do not have employment contracts to find meaningful balance. While this is not strictly a matter of the Executive Committee, there will inevitably be overlap, and the possibility for shift in the EC mid-session.

Issue 1: Share Price Formula

The January 2020 Executive Committee was unable to come to a conclusion on this matter, so it was extended to the February 2020 Executive Committee. The goals of this Focus Group are to come up with a reasonable yet straightforward formula to determine the Bank's value. The January 2020 Steering Committee came up with the baseline that there is both Book Value and Intrinsic Value, and those two must meet somewhere in between to arrive at the bank's market value.

Shortly after the new Committee sat, the decision was made that rather than set an official price as a company on our own valuation, we should instead simply publish a share "value" based on our books. As such, both current and prospective shareholders will be regularly updated on the book value per share, and they will be able to use that information to help make a more informed decision as to what they consider the value of those shares to actually be. As of the conclusion of this issue (4 February 2020), each of the 5 million existing shares has a book value of $726.56.

Issue 2: Resource Consignment

The February 2020 Executive Committee took up the task to work on designing a resource consignment product to add to our existing offerings. Almost instantly, the EC was supportive of the idea, and began the process of developing a small-scale way to implement the process. The plan that drew the most support was to appoint Cosimo as our acting Resource Trader for the duration of the initial testing phase. Spera would accept a contract, and once that one contract was completed, then we'd accept two. Once those two were completed, then we'd review the results and decide if we wanted to make this an official offering or adjust how we were running it.

Separately, on 6 February 2020, the Senior Executive Leadership Team (SELT) was approached regarding a possible merger with a complimentary organisation: Alpha Bank. The reason this is a complimentary organization and not competitor is that Alpha Bank primarily focuses on Resource Trading and Consignment, and uses its Lending/Savings Accounts primarily in furtherance of that endeavor. Quickly the SELT Team and Alpha Bank leadership understood that an outright merger was not conducive to either party, however a collaborative partnership was ideal. Alpha Bank would transfer its existing Savings Accounts and the accompanying funds over to Spera Bank, and would conclude but not start any new loans. Spera Bank would encourage any client interested to work with Alpha Bank on resource consignment instead of offering our own internal product, and Alpha Bank would redirect its interested parties to Spera for all their lending and savings needs. This was approved by SELT, and then moved to the Executive Committee for its determination.

For full disclosure, Greene was conflicted. As he stated, "As the Chair, I think it could be beneficial. In the short term we get access to the liquid cash from those savings accounts which we can lend right away. This bolsters our profile. The liquid gains would of course be muted by anyone who wants to withdraw their money. As Co-Managing Partner for Taith, I'm against this, as I have a savings account with Alpha Bank, and I would much prefer to not have to go find another bank to put my money into. I'm purposely diversified." No official vote was held since the EC had reached a consensus in support of this relationship. It then moves to the CEO/OL and CEO/VPO to implement the collaborative partnership.

Issue 3: Public Relations

The February 2020 Executive Committee took up the task to begin developing a new media campaign to promote the Bank and its offerings, especially in a post-war environment. Shortly after this was announced, Greene and General brought forward a plan to acquire Orbis Lottery, a lottery company that has set itself up with a loss-less. The Lottery only functions with the funds that it acquires for each drawing, so there is no overhead. Prior to the war, it operated with an average $100 million profit weekly. Negotiations led to the owners of Orbis Lottery agreeing to accept 3-month bonds in Spera in exchange for the ownership of the Lottery. Fairymoon, OL's Chief Operating Officer, transfers over to Spera as the new Director of Lottery Sales, and will be positioned as directly managing and overseeing the lotto. The sale price was $1.25 billion, which included approximately $500 million in "recoverable" assets (that is, external investments that could be readily liquidated). The adjusted price, after liquidation, was $750 million. As the Executive Committee reached an informal consensus, so an official vote was not held.

Issue 4: Developing a process for the 5 million unreleased shares

The February 2020 Executive Committee took up the task to develop a recommendation to be presented at the February 2020 Board Meeting to address the as-yet unresolved questions surrounding the 5 million unreleased shares in Spera. The understanding at the onset has been that in the event that the shares are subsequently released, they will ultimately dilute the existing ownership percentages. The Executive Committee arrived at the decision that we do not currently need the shares to be released, and some of us feel that those shares should never be released. Nevertheless, as a release could severely impact the Board and the Bank irrevocably, the final decision should be put to the Board as a whole. At the February 2020 Board Meeting, the full board will vote to adopt or reject the following process to permit the sale of the mentioned 5 million shares:

Process to release 5 million shares

Should this process be adopted by the Shareholders, it may not be amended except by meeting the participation and clearance standards set in this process (80% of shareholders must cast ballots, and 75% of the cast ballots must be to approve).

  1. At least three individual shareholders petition the Chair to bring the matter to the Steering Committee
  2. The Chair and Steering Committee unanimously agree that the Bank needs to sell the Shares. Should this succeed,
  3. The Executive Committee unanimously agree that the Bank needs to sell the Shares. Should this succeed,
  4. A special session must be called for the sole purpose of voting on this matter.
  5. For the full board voting, 80% of individual shareholders must cast ballots. Should this happen,
  6. 75% of the the cast ballots must be to approve the measure. Should this happen,
  7. The Steering Committee must draw up a plan that they unanimously agree on. Once this happens,
  8. The Executive Committee must unanimously agree to the plan. On failure, return to line 7. On success, proceed to line 9.
  9. A special session must be called for the sole purpose of voting on this matter.
  10. For a full board voting, 80% of individual shareholders must cast ballots. Should this happen,
  11. 75% of the cast ballots must be to approve the measure. Should this happen,
  12. The plan is enacted.

Issue 5: Revising the Dividends process

At the conclusion of the December 2019 Board Meeting, the Board ratified the decision to executive dividends monthly. The act of dispersing the dividends is the responsibility of the Chief Financial Officer, and the EC will decide exactly what that time table looks like. The initial recommendation was to have Dividends formally approved at the first Board meeting following the conclusion of the period (so January's dividends would be approved at February's board meeting) at which time the CFO would disperse the dividends the first day after the conclusion of the Board's meeting. Merits on the pros and cons of this recommendation were weighed, and ultimately, the EC decided on the following compromise:

Board meets on the third weekend of the month (Saturday and Sunday). On the Monday immediately following that meeting, the Dividends are dispersed. At the meeting, the Shareholders will also vote on whether they wish to receive 0%, 25%, or 50% of the bank's profits as dividends for the preceding month. As a result of this change, Shareholders will not receive their February dividends on the first of March. Instead, the Shareholders will vote on the dividends they wish to receive from February at the March meeting. The February 2020 Dividends will be paid out on 23 March following the March 2020 Board Meeting.

Issue 6: Revising the Rates for Bonds

Shortly into the February 2020 Executive Committee, the Senior Executive Leadership Team requested that the EC take up the task of revising the interest rates applied to bonds. The original interest rates were incredibly low, by any standards. They were also less competitive than our savings accounts. For 3-month bonds, the EC voted to increase the interest rate from 5% over the lifetime of the bond to 15% over the lifetime. For 6-month bonds, the EC voted to increase the interest rate from 10% over the lifetime of the bond to 60% over the lifetime. These put our bonds competitively at approximately 1.25% and 2.5% weekly, respectively.

Issue 7: Revising the Rates for Savings Accounts

At the request of Board Member Sidd, the Executive Committee agreed to take up the issue of considering for increase our Savings Account interest rates. The opinion of that Board Member was that our Savings rates were too low, and that they needed to be increased. For reference, the rates for the savings accounts are 0.5% for Rapid Access, 1.0% for Standard Access, and 2.0% for Employee Accounts. Two statements carried the sentiment of the Executive Committee so strongly and accurately that in lieu of the normal summary, the following will instead suffice.

  • "I personally am against this fairly strongly. I’d rather our comparatively lower savings rates highlight our much higher bond rates, [as] ultimately bonds are more useful than savings accounts to us." - General of the Union, CEO/OL
  • "I think the interest on our saving account, especially the standard saving account is fair as it is right now. We have to be able to make profit so I'm not for increasing it." - Lucianus, Deputy Chair