DroneShield Ltd. (DRN.AX) has introduced a new executive shareholding policy following shareholder criticism over recent insider share sales. The move aims to align leadership incentives and restore investor confidence in the defense technology firm.
- DroneShield (DRN.AX) introduced a mandatory executive stake policy effective January 1, 2025.
- Three executives sold 1.7 million shares between October and November 2024 for A$11.2 million.
- New policy requires executives to hold at least 0.5% of issued shares and restricts sales during blackout periods.
- Company revenue rose 23% YoY to A$28.6 million for FY2024.
- Market cap declined 14% in three months post-sales, reflecting investor concerns.
- Policy aims to improve governance and align leadership incentives in a high-growth defense tech sector.
DroneShield Ltd. (DRN.AX) has rolled out a mandatory executive stake policy requiring senior leaders to maintain a minimum ownership level of 0.5% in the company’s shares. The policy follows a series of insider transactions in late 2024, during which three top executives sold a combined 1.7 million shares for proceeds totaling approximately A$11.2 million. These sales, executed between October and November 2024, triggered concerns among retail and institutional investors about management alignment and long-term commitment. The new policy, effective January 1, 2025, applies to the CEO, CFO, and board members, requiring them to hold shares equivalent to at least 0.5% of the company’s total issued capital. Executives are also prohibited from selling shares within 12 months of joining the company or during quarterly earnings blackout periods. Compliance will be monitored by the audit committee, with non-compliance leading to mandatory buybacks or forfeiture of bonuses. The initiative comes as DroneShield reports a 23% increase in year-over-year revenue to A$28.6 million for the fiscal year ending June 30, 2024, driven by new contracts in Australia and the Middle East. Despite this growth, the company’s market capitalization dipped by 14% in the three months following the share sales, reflecting investor skepticism. Analysts note that the stake policy could help stabilize sentiment, particularly among long-term holders in the small-cap defense tech space. The policy may influence future executive compensation structures and could serve as a benchmark for governance reforms in similar technology startups. Shareholders will now have a clearer signal of leadership commitment, though the effectiveness will depend on strict enforcement and transparency in reporting.