The willingness of Coronation Fund Managers (CFM) to engage on remuneration issues was thrown into the spotlight at the company’s AGM on Tuesday.
Shareholder activist Theo Botha, who has been painstakingly chipping away at the asset manager’s remuneration disclosure for years, told the AGM that he had asked in writing for trustees of the group’s deferred remuneration trust to provide deeds to shareholders but to no avail. The trust is responsible for the 30% of pre-tax profit invested in Coronation shares and unit trusts and used for cash allocations and deferred remuneration. This amounted to R588 million in the last financial year, while the fixed component of remuneration of the group’s 331 employees increased by 14% to R217 million.
CFM chairman Shams Pather, who is also a trustee of the deferred remuneration trust, indicated that the trust was independent and that shareholders should approach it directly.
Through his lawyer, Botha had emailed the trust’s chairman, advocate Tony Crookes, in June and August last year but didn’t receive a response. Pather, who was asked by Botha at the AGM to confirm whether he was aware of this communication, said he would not answer Botha on behalf of the trust but did indicate he would speak to Crookes and ask him to respond.
Botha praised CFM for improved disclosure on some remuneration issues such as key performance indicators but asked if changes to a long-term share scheme would be put to shareholders to vote on, and said that directors should ask for shareholder approval in the interests of full disclosure and good governance.
Directors were reluctant to make any concessions on this and other calls for greater transparency. Botha said that he had been making such requests of CFM since 2015. “Only when you put forward a policy document can we enter into a discussion on the pros and cons of that policy. I don’t think there is anything harmful in asking, I don’t know why I am getting some form of kickback.”
He also asked why CFM only disclosed remuneration of the CEO and CFO, and not other prescribed officers such as the CIP. Board member and former CEO Hugo Nelson said the way CFM disclosed “is the way we have chosen to disclose” and directors believed it was comprehensive and aligned to the interest of stakeholders, and this was “an agree to disagree scenario”.
CEO Anton Pillay pointed out that there was only a 1% increase in the group’s total employment cost, “which talks to the variable remuneration structure we have in place”.
Botha told Moneyweb that he has asked for the trust deeds, a simple document of rules and regulations of the trust, and was ignored. “Why can’t shareholders see these rules?” he asked. “If changes were made, why weren’t they put to the vote?”
Botha told Moneyweb that CFM’s disclosure has improved, “but it should be transparent as the biggest investor on the JSE and one which is holding other companies to account”.