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Woolies execs forgo bonuses for 3rd year running

CEO under pressure to make David Jones acquisition work.
The group has reduced its bonus pool for 2020 by 50% in Woolworths SA, 50% in Country Road Group and 65% in David Jones. Image: Jack Atley, Bloomberg

Executives at Woolworths Holdings have largely not been paid short-term incentives for the third year running. Only a single executive – Zyda Rylands, CEO of Woolworths South Africa – was paid a short-term incentive bonus for the year ended June 30, 2019. Rylands received a bonus of R2.1 million for the turnaround in the Woolworths South Africa business.

However, despite the performance multiplier of the SA unit triggering a bonus of 50% of her guaranteed pay of R8.9 million, the remuneration committee agreed to reduce the group’s short-term incentive bonus pool by 50% “to align with budgeted growth expectations”.

Read: Woolworths sees annual profit hit, writes down Australian business

After the sharp cuts to the bonus pool, management in South Africa shared short-term incentives equivalent to 1.55% of group adjusted profit before tax (aPBT) of R4.062 billion (R63 million), while store staff shared 1.18% (R48 million) and its supply chain staff shared a pool of 0.20% of aPBT (R8 million).

The group says its bonus pool for this year (2020) has been reduced by 50% in Woolworths South Africa, 50% in Country Road Group and 65% in David Jones. “This has been done to align the bonus pools with the initial budgeted growth expectations of the operating entities. The committee may review the bonus pools during the year depending on trading performance achieved in each of the operating entities.”

Lean times for executives

With the exception of Rylands, the last time CEO Ian Moir or any other executive director received a short-term incentive payment was 2016. In that year, Moir was paid a short-term incentive bonus of R14.96 million with guaranteed pay of R16.6 million.

Woolworths Group executive remuneration in context






Share price





Group aPBT










Ian Moir (CEO) total pay





Reeza Isaacs (FD) total pay





Sam Ngumeni (COO) total pay





Zyda Rylands (WSA) total pay





* Previously, the group profit before tax and exceptional items (PBTAE) measure was used

** Excluding the 53rd week

In recent years, Moir has come under increasing pressure to make the acquisition of Australia’s David Jones deliver (the group had to impair the value of David Jones by R13 billion in the 2018 and 2019 financial years).

The Woolies board has requested that Moir spend more time in Australia until the department store business is turned around. He has 1.8 million unvested shares under the group’s long-term incentive scheme, with a fair value figure of R35 million. For these to vest, performance across headline earnings per share growth, return on capital employed and total shareholder return will be measured. Given its size, these are (effectively) directly linked to David Jones’s performance.

Market cap down

Over the last four years (since executives last received short-term incentives), the group’s market capitalisation has reduced by R36 billion to R51 billion as at 30 June.

In FY2019, the group missed the long-term incentive trigger of greater than 93% of adjusted profit before tax by just 10 basis points; it achieved 92.9% of profit before tax, “adjusted for impairment of David Jones assets, relocation costs (net of grants received) and store exit costs, net onerous lease provisions raised and unrealised foreign exchange losses incurred/reversed”.

Still, executives received their annual rolling allocations of long-term incentives under a plan revised in 2019. Moir received restricted share plan (RSP) awards with a face value of R28.5 million in the year. This equates to 150% of his guaranteed package. Isaacs, Ngumeni and Rylands received awards in the performance share plan (PSP) with a face value totalling R20.6 million (equivalent to 100% of their guaranteed pay).

‘Roles recognised’

Additionally: “The committee recognised the roles that the executive directors and other key individuals perform in ensuring that the group delivers sustainable returns for shareholders and the delivery of the long-term strategy. Against this context, restricted shares, with a total value of R56 million, were awarded to the group finance director, chief operating officer and CEO of Woolworths SA.”

Isaacs received RSP shares with a face value of twice his guaranteed pay, while Ngumeni and Rylands received RSP shares with a face value of triple their guaranteed pay. These vest over the next five years.

All long-term incentives will be measured against the following performance conditions:

Source: Woolworths

The group has been under fire on its disclosure of remuneration, with only 60% of shareholders voting in favour of the non-binding resolution on the implementation report last year.

Because this failed to clear the 75% threshold, the group engaged with dissenting shareholders via a conference call in December. Following this, the group notes “a specific workshop dedicated to these matters was held by the remuneration committee”.

It states: “Informed by these discussions, changes have been made to the remuneration policy and we have enhanced the disclosure in the implementation report.”

The group has introduced “malus and clawback provisions” in both the short- and long-term incentive schemes. It removed the group profit trigger for the short-term incentive scheme, and this now applies at the operating entity level.

Woolworths also now discloses long-term incentive targets in significantly more detail, along with “additional disclosure of the linkage of strategy and the individual executive director’s goals”, and says “more clarity [is] provided in the retrospective targets of elements of the … short-term incentive scheme.

Shareholders will vote on remuneration and other matters at the group’s AGM on November 27.

Hilton Tarrant works at YFM. He can still be contacted at

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A good start
But see this against execs + families moving to AUS at shareholder expenses and they still have a job.

Watch these ‘loyal’ execs (including Moir) jump when a better job offer in AUS comes along!

Moir’s family is there already.

Shame man. Must be hell to survive on these kind of salaries and bonuses but somebody must do it I suppose.

In an era when “knowledge worker” value-add is increasingly impossible to calculate, executive pay has dislocated entirely from that of the regular workforce.

It seems plausible that executives today pay themselves what they do in order to justify their position, and not the other way around.

With a basic like that, who needs a bonus?

Considering the damage Moir and Team have done to shareholder value (BILLIONS!), they should not only be working for nothing until they fix the problems they caused, but forced to pay back ALL the past remuneration given to them during this fiasco.

“forgo” sounds romantic, like a selfless act of self sacrifice. Call a spade a shovel : they failed to clear the hurdles. It is called a face plant in athletics.

This is a classic case of how SA companies are looting SA and taking money abroad at the cost of “poor” shareholders.
All done for the benefit of some top execs and their cronies.
Woolies, Sibanya, Famous Brands, Capco, Steinhoff, Sasol and hundred more have all bought useless ventures at ridiculous prices and their shareholders are now paying the price.

One cannot blame the unions for yelling no value added here. Moir and his fellow rubbish executives lost the company billions with downright poor management . Should have been sacked!

MTN and Sasol are the worse for me at that. Nothing happening in South Africa is impacting their business yet their foreign investment hurts the stock price in local listing. Sasol has carbon tax issues here and MTN with their various consumer airtime cheats and sim swap issues but those problems aren’t what dents the share price. We need to be taken serious by the people who have escape plans because the rest of us don’t.

Management see the writing on the wall re. South Africa and hence the desperate dash to exit. More importantly shareholders (through the boards of these firms) have supported the divestment from South Africa. If South Africa was a place where you could earn a return in excess of the cost of capital, there would be no need to look for other opportunities. Some of these investments will fail and others will succeed, that is the nature of capitalism. In the same vein, management should be held accountable for failure and rewarded for success (which does not seem to be the case for Woolworths).

A retailer who has largely stayed in South Africa is Massmart, their share price is down 66% over 5 years. Pick n Pay is up 6% and Shoprite is down 5% over 5 years. Over 10 years Woolworths has not done too badly relative to Massmart (+246% vs -56%). In hindsight Woolworths was way over-valued in mid-2015.

End of comments.





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