Splitting hairsAvusa unbundling payout is obscene and immoral |
But at least it unlocked shareholder value for some.
Journalism awards generally laud work that uncovers lies and chicanery in government or the dire circumstance in which South African's poor live but last week a courageous piece of journalism appeared in Business Day that has got Media Land hugely indignant - and rightly so.
Enterprising media reporter Chantelle Benjamin revealed that Avusa's (JSE:AVU) CEO, Prakash Desai, pocketed more than R24m when he split the company in two and sold a valuable stake in pay-TV channel MNet. Business Day's editor, Peter Bruce, must have held his breath when he decided to run the piece because Avusa owns half of the paper.
I was once a media reporter for Business Day and would fret dreadfully when it came to writing stories involving our owners or bosses. The master doesn't take kindly to having his little hounds ask uncomfortable questions of him. It only happens if the editor has balls.
There's nothing illegal in Desai's payout of share options and I guess R24m buys you a pretty thick skin. For his part, Desai - more used to toadying half pages in Business Times when the company's results are released (Avusa also owns the Sunday Times) - didn't even bother to speak to Benjamin though they work in the same premises in Rosebank. He said in a statement, according to Business Day: "I was forced, obliged to exercise all options allocated over the past ten years of employment at the group when the legal entity ElementOne was formed and I parted company to a new legal entity".
Being forced to cash in R24m because of a plan you were involved in hatching must have been a trial and now the minions of Avusa are being damn ungrateful.
The Avusa salary slaves are, in fact, spitting, especially as this revelation comes as they are being forced to take all their leave before the start of the next financial year - none will be carried over - a move one can only presume is designed to plug a hole in falling revenue for the next set of financial results. At least that's the bitter twitter from staffers on the cocktail circuit.
Not so long ago many were railing against the SABC paying its axed Group CEO, Dali Mpofu, R11m but that looks like small change compared with this unbundling bonanza and, in hindsight, one has to question the wisdom of the unbundling for three reasons:
* When it came to terminating and paying out the Avusa share incentive scheme, it was a controversial move among shareholders;
* Avusa's share price has taken a tumble since last year; and
* Mvela Group, Avusa's new majority shareholder since the unbundling, said this month that it was not altogether happy with its investment.
At the time of the unbundling, Avusa employees (and I was one of them) were told it would "unlock further shareholder value", whatever that means. Many may wonder now whose "shareholder value" was being referred to - not the executive shareholders who would stand to pocket millions, surely? To rub salt into the wounds of minions is also the fact that payTV turned out to be Naspers's (JSE:NPN) big hedge against the recession in their annual results earlier this year.
R24m is a lot of money to merrily dish out for a company like Avusa - and millions more would have gone to others in the company. We only know about Desai's payout because he is a director of the company. Avusa is hardly the R80bn multinational that is Naspers.
The whole deal - and here's where I do my modest bit for courageous journalism as my spouse continues to work for Avusa and also had a minor benefit from the share deal - is obscene and, frankly, immoral.
Just recently we've had questions asked about the gross inequity in pay between Eskom bigwig Jacob Moroga and the average Eskom worker. There's no reason why we should tolerate the same in the private sector and, in fact, when the boss rejects the big payola, it goes a long way to winning the respect and loyalty of the workers, especially in these economic times.
I was told of a large manufacturing firm based in South Africa recently which responded immediately to the signs that a recession was coming by stopping all bonuses and raises for the entire executive team. Unsurprisingly, the company has pretty much sailed through this awful year without any disputes with the union.
Of course, it would be wrong to suggest media mogul Desai and his pals acted with anything other than the loftiest of motives as they looked after the interests of their shareholders, staff and the media titles they own.
I would never for one moment imagine that these guys would let the thought of a Ballito mansion or a Camps Bay retirement interfere with such grand interests. I don't have to - thousands of their loyal staff are doing it for me.
*Gill Moodie spent 14 years as a salaried hack in print media in South Africa and the UK before escaping to the blogosphere and freelance journalism. She is the publisher of Grubstreet http://grubstreet.co.za/ in between unpacking and packing the infernal dishwasher and bringing up a four-year-old with attitude.
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