Thread by @Gudvangen4

@ProsusForAll I have a question about Prosus compensation components as shown in Page 140 of 2021 annual report. It seems 92.5% of the compensation is tied to ecommerce portfolio growth excluding Tencent and Mail Ru.

My question is, since the Tencent stake is excluded, shouldn't the funds acquired from the sale of Tencent also be subtracted from the portfolio value. If you don't subtract management can just increase the value of portfolio by simply selling Tencent shares and use the proceeds

to buy something which will increase the ecommerce portfolio value.  So isn't that flawed way of remuneration because management can always sell Tencent to grow Ecommerce portfolio value increase instead of based on organic growth of the portfolio.

This explains everything the discount and the value destruction. The mgmt gets 92.5% of the LTIs based on growth of non tencent portfolio. Not IRR, not share price performance and not discount to NAV reduction. Just the growth rate excluding tencent.

So $PROSY $NPN use $TCEHY ass piggy bank to bankroll portfolio purchases and get paid based on the estimated value increase of that portfolio. There is no way they don't get paid as they are simply transferring funds from Tencent to non tencent while ripping off shareholders.

Wonder if @MohnishPabrai and @GSpier are aware of this travesty

This also incentivizes them to splurge on even larger acquisitions like Billdesk and borrow against tencent to increase reconnect portfolio value. The price and profitability isn't a factor at all.... as long as they can mark to market these assets at a higher value

I'm a shareholder who bought #Naspers $PRX to own Tencent, but mgmt's goal is to increase investment portfolio value(considered worthless by market) using sales of tencent (what is of value). So comp incentives are literally exact opposite of what they should be

Got confirmation from Prosus that global e-commerce portfolio valuation takes dilution due to capital infusion from Tencent sales into account. 😅 Atleast they got that right.