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

Woolies shareholders clamour against Moir’s exit package

Group has committed to paying its retiring CEO R77m.
Ian Moir is set to receive a sizeable restraint of trade payment. Image: Halden Krog, Bloomberg

An unprecedented 82.24% of shareholders voted against Woolworths’s remuneration implementation report at the group’s annual general meeting on Wednesday, in what was largely seen as a protest against a generous exit package granted to former CEO Ian Moir.

The two resolutions on remuneration – one on the policy, the other on the implementation of that policy – are non-binding advisory votes. Thus they have no legal effect; the votes are intended just to send a message to the board, and the board is not bound by the vote.

Moir championed the R21.4 billion acquisition of Australia-based retailer David Jones in 2014, which required a hefty rights issue as well as the taking on of substantial debt. By 2019 the group had been forced to write off R13 billion of the David Jones balance sheet value, as the Moir-led management team failed to turn around the struggling Australian retailer.

In Moir’s defence the ambitious plan did receive overwhelming shareholder support back in 2014.

The share price shot up to an all-time high of R108 in 2015 on the back of bullish expectations for what was then the largest retailer in the southern hemisphere. In his 2016 report, former chair Simon Susman told shareholders that having a large Australian business (Country Road as well as David Jones) had helped to cushion the group from the shock of former finance minister Nhlanhla Nene’s dramatic firing in December 2015.

Since that 2015 peak the share price has slumped 66% to a current R37.

In February this year, after almost two years of market speculation, Woolworths announced Moir was stepping down as CEO of the group.

Read: Rating Ian Moir’s decade at Woolies

His exit had been flagged by the board during financial 2019.

Enraged shareholders

However shareholders were outraged when it emerged that Woolworths had committed to paying its retiring CEO R77 million.

Slightly over half of that sum – R43 million – is payment for 2020, but the more shocking portion is a R34.3 million restraint of trade payment. This will be paid to Moir in 2023 if he adheres to the terms of the restraint.

At Wednesday’s AGM, remuneration committee chair Zarina Bassa said the R44 million “exit arrangement” had allowed for a thorough and seamless transition between Moir and new CEO Roy Bagattini. She pointed out that Moir had not received any bonuses or salary increases for the last four years.

Read:
Roy Bagattini takes Woolworths helm as profit slides
New Woolies boss bags R54m in shares

Disgruntled shareholders told Moneyweb that in the context of the value-destruction wreaked over the period it was bizarre to talk in terms of bonuses.

As for the restraint payment, Bassa said this covers employment in any capacity and extends for two years after Moir’s last day at the office – believed to be November 27.

“The board deliberated and concluded that the Australian businesses, and consequently the group, would be significantly disadvantaged if Ian had to work in retail and related industries in Australia, given the highly competitive nature of retail and as the business was undertaking certain key strategic changes,” Bassa told shareholders attending the AGM. The related industries are thought to include property.

Payment of the R34.3 million is expected to take place during financial 2023 “provided Ian abides by the terms of the restraint”.

“Should he breach the restraint, the payment is forfeited in its entirety,” said Bassa.

One shareholder who attended the meeting said while the hefty opposition to the remuneration was largely attributable to Moir, there was also concern about the R15.7 million Bagattini received for the four months he was CEO.

Woolworths told Moneyweb after the meeting that the group needed to ensure it selected the most appropriate candidate for the role. “The group CEO role is a complex and challenging role and the retail landscape is currently undergoing structural change. Furthermore the group is currently facing a unique set of challenges,” said a spokesperson for the group.

They added that they had looked for an individual who was not only an experienced retailer with an apparel background, but also someone who was active in international businesses and had a proven track record of business turnarounds.

Read: Woolworths’ R750m ‘investment’ in lowering food prices – chicken too

At Wednesday’s AGM the remuneration policy resolution scored 25.24% opposition and Bassa’s reappointment to the board as well as the audit committee was opposed by 13.59% of shareholders.

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

AUTHOR PROFILE

COMMENTS   30

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

You must be signed in to comment.

SIGN IN SIGN UP

Ian Moir is a professional Ozzy Con and should pay back all his earnings instead of getting a handshake. What rubbish is the Woolies board up to! This is a disgrace and white collar crime.

Moir and senior execs saw an easy way to leave SA – use shareholders money, buy a business, relocate in AUS, all paid for with shareholder funds, plush new job and high salaries in AUS – – – – f… the shareholders!!
No proper thoughts gone into the viability of the business.
Moir should pay back before he goes back to his country of birth.
Senior execs must pay back all benefits they recieved
Current Woolworth committee members and board should foot the bill if the above do not pay back.
For a moment there, I thought Wiese was in charge – given the abuse of shareholders’ money to benefit the ‘managers’.

His country of birth? Scotland?

Reminds me of Old Mutual and the disastrous move to London. Mr Levett et al.

And we all thought only the ANC are masters at conniving?

If the share price is high the CEO seems to take shares as an exit, if it is low then they should also take shares as an exit.

In my opinion, he should take the 66% knock that shareholders are expected to take. Fairs fair and, after all, he’s had more control and information about the performance of the company than shareholders have had. Not many people have enjoyed bonus’ over the last four years, so I’m not sure why Mr Moir qualifies for this consideration, considering his performance and that of the Woolies share price!

This is a disgrace that he is being paid a restraint of trade for this amount of money.

He has destroyed shareholder value over the last 5/6 years .

Who do the Woolworths board think is actually going to employ him on his past record that they need to pay a restraint

Woolies should pay their competitors to take Muir. That would get a massive yes vote.

My thoughts exactly. If anything they should encourage him to go and work for a competitor. Maybe he can lend the next David Jones for them.

The Aussies are laughing at this. How many SA companies have to be burned in this way..?

Also, why pay the man a restraint of trade. Let him trade freely and join the competition or start something in competition – he is bound to stuff that up like he did at Woolworths..!

Seems the ultimate responsibility for this debacle lies properly on the necks of the board members. Every single one of them!

It was they that appointed Moir, and supposedly took responsibility for overseeing his performance.

Caligula famously appointed a horse as a senator to the Roman Senate. You can’t shift the blame to the horse when things go wrong!

Seems – like so many other boardrooms too – they were fast asleep in their duties. Except when it came to cashing in the perks of their office.

Boardrooms supposedly represent the interests of the shareholders in keeping the executive management on a short leash.

It seems that there is a material breakdown in the trustworthiness of the oversight of the overseers, and the chain of command between the general body of shareholders, and the booard!

This is a general problem of company governance, and not just a Woolworths issue.

This general need for DRAMATICALLY improving governance oversight; the speed with which a board should be expected to act;and the appropriateness of compensation for failing to do a good job;is worthy of aggressive study at some university business school, and then implementation into business practice – and law.

The current situation is wholly unsatisfactory.

Agree. What boggles is that there should have been a restraint of trade signed upfront when Moir was employed. No need for a pay off later then.

I’m of the opinion that Moir (and his immediate associates) engineered the purchase of David Jones so that he could relocate to Australia, all expenses paid (by Woolworths). The deal was cloaked in the usual “good for business expansion” nonsense to con the Woolworths’ share holders into thinking that Woolworths was on its way to “world wide glory”. He’s obviously achieved his objectives (at the cost of Woolworths’ shareholders. After all, who would want to live in a corrupt, unionised, lawless society?

I like the word “engineered” – that’s how white collar criminals get away with it.

Huh? He’s an Australian citizen (of Scottish birth) and he was running Country Road before he was brought to SA to run the Group. He’s only now gone home. Pretty much destroys your argument.

True! But what a what an expensive and ignominious way to get back home.

Re: ‘… complex and challenging role and the retail landscape is currently undergoing structural change. Furthermore the group is currently facing a unique set of challenges…’

Lol.

Moir destroys close to R15 billion of shareholder value & they want to reward him for NOT working for a competitor. Glad I don’t hold Woolies…

Why pay a restraint of trade? Given what he has done at Woolworths, let him go to a competitor and mess them up. He doesn’t possess any special skills that would disadvantage Woolworths. In fact he will be a blessing in disguise by going to a competitor given his track record.

The restraint lasts only two years – what prevents Moir to work in opposition after two years.

The restraint is just an excuse for further payment.

Who is responsible for this mess: The shareholders, through the big fund managers, like PIC, Sanlam, Mutual, Coronation, Alan Grey and others. They have failed in their fiduciary duties to their fund members and have repeatedly voted for this.

Executive remuneration reminds one of the feeding at the trough of African governments.

This share has really performed very poorly.

A big loss for the shareholders, but seems not for the top management.

Maybe it is time for the shareholders to demand change to the renumeration structure!

Restraint of trade???? The R77m would be money well spent if Woolworths paid a competitor R77m to take Moir!

in 2008 i was offered a “can t lose” deal by an Oz crowd . my gut told me something was wrong , so i declined.
an ex Zimbo living in Oz warned me about how sly Ozzies are and how they catch Saffers time and again because of our gungho mentallity , especially Afrikaaners . he is a wise man when i see how many SA co’s lose their boots downunder

All the result with South Africans obsession to invest abroad – Just how many SA companies have been successful offshore???

Ubuntu Linux …Nando’s

Not exactly FAANG but all the same 🙂

This share seems to have the same amount of disgruntled shareholders as the Sasol share does.

Whatch this space.

Woolworth’s has some quality products and their foodstuffs are normally well presented and of a high quality – pity management don’t apply similar principles with their emoluments

How on earth cam Mrs Bassa and her fellow board members look a shelf packer in the eye. The shelf packer goes home in an unsafe taxi, to an unsafe township and gets a shocking salary. Despite the long and tedious hours he or she adds value to the company. Now the board wants to pay a failed executive telephone book numbers so that he doesnt compete!

This fellow-together with his accomplices on the Board-destroyed shareholder value and the board wants to restrain him? From what? destroying a competitor-please do!

The entire board is guilty by association of shareholder robbery, should be declared delinquent and dismissed .

End of comments.

LATEST CURRENCIES  

USD / ZAR
GBP / ZAR
EUR / ZAR

Podcasts

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

Follow us:

Search Articles:Advanced Search
Click a Company: