Something needs to be said here about last night’s NR from IMG that announced large-scale layoffs and “tough decisions”, because the obvious decision that Pugliese should have made wasn’t made. Within minutes of the NR hitting, I received two mails from people who work in Canada’s capital markets and here are the title lines of the two mails, unsolicited and as far as I know totally unconnected to each other professionally:
‘IMG forgot one special person’‘Looks like they fired the wrong guy’
The bodies of the mails were basically the same message, too. Now let us remind ourselves of Mr Stephen J. J. Letwin’s contribution to costs at IMG, this taken from the 2014 MIC:
In simple terms, he’s on $3m a year, half of that in cash and mostly earned via “performance bonuses” (term used in its loosest possible manner). And now a comparative chart that puts IAMGOLD up against industry benchmarks, the precious metals ETF GDX and the gold price ETF GLD:
This is the one year chart, but it’s just as bad if you go back two or more. For example, over 24 months IAG is nearly 90% down.
What we saw last night from IMG is a corporate suicide note. Why shareholders are supposed to put up with this company’s stupidity is beyond all my understanding of the basis of capital markets. Until Steve Letwin is fired, things will only get worse.