You are currently viewing our desktop site, do you want to download our app instead?
Moneyweb Android App Moneyweb iOS App Moneyweb Mobile Web App

NEW SENS search and JSE share prices

More about the app

Tongaat cuts executive pay

And ‘remains committed to making those responsible for historic mismanagement accountable’.
The reductions in overall pay were due to substantial cuts in turnaround incentives and the non-payment of bonuses. Image: Shutterstock

Tongaat Hulett’s remuneration committee has done something unusual – it has listened to the concerns of its shareholders and slashed the remuneration of its top three executives.

The move is likely to be welcomed by many shareholders who were dismayed by the generous awards made for financial 2020 before there was sufficient sustainable evidence that progress had been made in turning around the troubled sugar and property group.

However, the decision may have been unavoidable given the hefty increase in headline losses reported for the year to end-March 2021.

Hyperinflation in Zimbabwe, a reduction in property sales, and refinery losses were among the factors contributing to a spike in headline loss to over R1.1 billion from a headline loss of R285 million in financial 2020.

In the group’s just-released annual report, the remuneration committee also assures shareholders that the board “remains committed to making those responsible for historic mismanagement accountable”.

Read: Tongaat Hulett pursuing civil, criminal action against former execs

The issue of recovering losses from the previous management team and auditors had been raised by shareholders during a number of engagements in 2021.

What about the auditors?

Disappointingly, the prospect of holding the auditors to account appears less certain.

The remuneration committee noted that: “A review of the role of the auditors has been stalled so as not to compromise their independence.”

It promised that detailed discussions on this topic would commence “in due course”.

The cuts

Tongaat Hulett group CEO Gavin Hudson’s remuneration in 2021 was cut to R9.9 million from R25.4 million in 2020.

CFO Rob Aitken’s pay package was cut to R6.6 million from R15.3 million and executive director Dan Marokane saw his pay reduced to R6.9 million from R16.7 million.

Group CEO Gavin Hudson took a R15.5m pay cut. Image: Supplied

The reductions in overall pay were due to substantial cuts in the turnaround incentives as well as the non-payment of bonuses. In 2021 Hudson received a turnaround incentive of R2 million, down from R8.5 million in 2020. In addition to that incentive, the CEO was paid a bonus of R9.4 million in 2020.

Read:

Aitken’s turnaround incentive was cut to R1.3 million from R5.4 million and Marokane’s was reduced to R1.4 million from R5.9 million. In 2020 Aitken had received a bonus of R4 million and Marokane a bonus of R4.4 million.

When the group presented its results in July, Hudson assured shareholders that the turnaround remained on track and that it had managed to slash its debt by almost half during the financial year.

Hudson said that despite the various headwinds, including Covid-19, the group’s turnaround efforts were yielding positive results.

The R34 million reduction in the pay bill for the top three executives represents a substantial chunk of the R100 million-plus of savings on employee incentives the remuneration committee says will help compensate for the losses at the sugar refinery suffered in the second six months of the year.

Despite the executive pay cuts, the remuneration committee said the group had been able to retain good talent and continued to attract excellent skills during the year.

“We will continue to look to retaining our talent and ensuring that we appropriately reward activity that is necessary at this stage of the broader turnaround programme, and this will also be agreed upon with shareholders.”

Read: Loss-making Hulamin awards bosses R3.2m in share incentives

Please consider contributing as little as R20 in appreciation of our quality independent financial journalism.

AUTHOR PROFILE

COMMENTS   7

Sort by:
  • Oldest first
  • Newest first
  • Top voted

You must be signed in to comment.

SIGN IN SIGN UP

Good! Increase the workers pay rather and let’s at least try stimulate the economy

This must be a first in recent times. Just do the right thing and watch your company prosper.

Do the hired help have ANY shame at all?

Which C-level in this country is worth R50k per day, every day of every week of the entire year for that R1m a month package?

Which of them started and built a successful business instead of being glorified bus conductors their whole corporate life?

You will never see this – executive pay cuts – in Parliament.

Shame, poor executives. Must be eating only dry bread now.

End of comments.

LATEST CURRENCIES  

USD / ZAR
GBP / ZAR
EUR / ZAR
BTC / USD

Podcasts

INSIDER SUBSCRIPTIONS APP VIDEOS RADIO / LISTEN LIVE SHOP OFFERS WEBINARS NEWSLETTERS TRENDING PORTFOLIO TOOL CPD HUB

Follow us:

Search Articles:
Click a Company: