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What the movers and shakers have been up to

A onetime force in the South African business community passes.
The CEO of Truworths is set to stay at the helm for another two years, extending his reign to 32 years, which must be some sort of world record. Image: Moneyweb

Well done to Massmart CEO Mitch Slape who made a book profit of R1.25 million last week by buying shares in the company he runs.

Read: Mitch Slape makes R8.18m investment in Massmart

At the beginning of the week Slape, the American who was sent over by Walmart to rescue Massmart from decades of poor management, bought 300 000 shares for R8.18 million.

By the end of the week the shares had ticked up from R27.29 to close at R31.50. This meant his shares were now worth R9.45 million.

Non-executive director Olufunke Ighodaro also made a nice little profit on his investment in the company.

The amazing thing is how seldom – almost never – have any Massmart executives bought shares in their company. They are much more likely to be sellers of Massmart shares they received as part of their remuneration packages. Slape’s purchase raises the spectre of a Massmart CEO who believes in the company’s prospects.

Coincidentally, days later Coronation Asset Management announced it had more than doubled its stake in Massmart to 5.77% from 2.51%.


Meanwhile, over at furniture retailer Lewis, executives were also ‘acquiring’ shares last week. But the Lewis acquisitions were significantly different from Slape’s as the Lewis shares were ‘acquired’ at no cost.

(Imagine trying to explain the ‘acquisition at no cost’ concept to one of Lewis’s customers.)

The shares were handed over to the executives as part of their bonus; by choosing shares instead of cash the executives won the opportunity for an allocation of almost double the number of shares. Performance targets do have to be met on a rolling three-year basis, but remuneration tradition in SA generally ensures these are within easy reach and can be adapted to cope with unexpected developments such as Covid-19.


Also on the retail front, it appears Truworths’s very long-serving CEO Michael Mark is set to stay at the helm for another two years.

That will make it 32 years that’s he’s held the top position, which must be some sort of world record.

Apparently the board has asked Mark to stay on as part of its succession planning. Surely the request is evidence of the board’s lack of succession planning? How is it possible that they have not been able to identify and develop other talent within the group for the past 30 years? Can the group be that devoid of management talent?

Of course, there was that bizarre attempt to replace Mark back in 2015. That was when the board looked to not just another company or another sector, but another country for a replacement. Veteran French businessman, Jean-Christophe Garbino joined Truworths in 2014 with a view to taking over from Mark in June 2015. But after shadowing the CEO for the best part of a year Garbino exited without any explanation or at least not an explanation that ever got a public airing.

Shareholders should be extremely worried about a company that is apparently so dependent on one person.

The danger is that the Truworths culture as well as its systems, processes, and so on have fossilised around Mark and that the ‘succession planning’ will not be robust enough to deal with his separation in two years’ time. Keeping him on as a consultant for an additional year is not much of a solution.



By contrast, Graham O’Connor’s reign as CEO of Spar seems almost fleeting.

O’Connor, who rejoined the group in 2014 as CEO and led it through an exciting growth phase, will be stepping down after the AGM in 2021. The very good news is that Spar has top-notch talent within its ranks and has appointed the current MD of Spar South Rand as its new group CEO.

The not-so-good news is that O’Connor will become chair as soon as he steps down from the CEO position. He will replace long-serving Mike Hankinson who retires after next year’s AGM.

The move from CEO to chair is frowned upon by governance experts who rightly worry about the dangers of intimidating second-guessing.

The man from South Rand will have to be particularly robust.

Old Mutual

And, far from the world of retail, last week former Old Mutual executive chair Mike Levett died. One of the sad things about this news is that, apart from his family, few people seem to have noticed. This is remarkable given that Levett was such a powerful force within the South African business community for much of the 1980s.

He drove the group’s demutualisation process and made the controversial decision to launch its primary listing in London in 1999. At the time Levett described the move as a “win, win, win” situation for Old Mutual, for its policyholders and for Southern Africa. It turned out to be a disastrous value-destroying venture for all three.

Levett himself scored quite nicely out of the move, collecting R150 million at the end of his two-year stint in London. That seemed excessive at the time but fast-forward almost 20 years to 2018, when Bruce Hemphill was awarded a R223 million package to unwind the London folly. And then Old Mutual shareholders had to contend with the Peter Moyo saga.



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Mitch Slape had better take his profit offshore quickly..otherwise he faces losing the profit thanks to the performance of the Rand!

Very informative summation of current business activity. Please Ann keep us informed.

End of comments.





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