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Gold Field’s CEO offers to waive 2013 bonus

Over BEE deal.

JOHANNESBURG – The chief executive of South Africa’s Gold Fields has offered to waive his 2013 bonus due to concerns over a 2010 black empowerment deal, the company said on Thursday.

Gold Fields three years ago gave a 9% stake in its South Deep mine to a group of black investors to meet government targets for black economic empowerment (BEE), which include black ownership.

South Africa’s ruling African National Congress (ANC) has championed the policy of black economic empowerment to redress inequality after decades of white minority rule under apartheid which came to an end in 1994.

Gold Fields former chairwoman Mamphela Ramphele – who has since founded an opposition political party to challenge the ANC – told South Africa’s Business Day newspaper in March the company had come under government pressure to include certain specific shareholders in the deal.

Gold Fields, which said Ramphele’s comments represent her personal view, appointed an international law firm to investigate the transaction “following press reports raising questions” about the deal.

“The Board’s examination has highlighted that the implementation of the transaction did not consistently meet the high standards set by Gold Fields,” the company said in a statement on Thursday, adding it still believed the deal was one of “lasting benefit” to the company and its black shareholders.

It said the investigation had identified areas requiring “further attention”, including the need for more transparency.

“In recognition of the concerns which have been generated around the BEE transaction relating to South Deep, CEO Nick Holland has offered to waive his bonus in respect of the 2013 financial year,” Gold Fields said.

“The board continues to have full confidence in Nick,” it added.

Holland’s overall compensation totalled R45.3 million ($4.43 million) in 2012, with 8.5 million, or 19%, coming from his annual bonus, according to the company’s annual report.

($1 = 10.2338 South African rand) 

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Stephen Katzenellenbogen

Stephen Katzenellenbogen

NFB Private Wealth Management
Moneyweb Click an Advisor
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Moneyweb Investor Issue 24

The relative strength of the rand has seen South Africans relax since the cabinet reshuffle and sovereign downgrades by S&P and Fitch. Don't be deceived - this is a self-inflicted wound. In the May issue of The Moneyweb Investor, we take a closer look to see which companies are likely to thrive and which will not, in the post-downgrade world.