What a wretched, wretched time it is. The only death that counts is a Covid-19 death; what an utter tragedy for all the families affected.
And what a tragedy for all the other deaths that now seem to go almost unnoticed. Of course the chances are that death statistics for March and April will be significantly lower this year than they have been for many years before, as the thousands of alcohol- and road-related deaths are curtailed by the lockdown measures. The worry is the time after April: that’s what the government is rightly focused on.
How things have changed. It’s likely to be several months, maybe longer, before we think of ‘PPE’ as that quaint old Oxbridge qualification required by every ambitious pre-1990s Anglo American executive. Politics, philosophy and economics is no longer important – now it’s all about personal protective equipment.
But through it all, some form of life and business continues.
Edcon CEO Grant Pattison was first to stake a claim on any Covid-19 recovery dosh that might be going around. Just hours before the lockdown he gave some substance to South Africans’ most morbid Covid-19 fears. Such was the state of nervous apprehension at that stage that most people overlooked the fact Edcon has been on a form of life-support for several years; years during which executives and consultants were generously remunerated.
Having spent an inordinate amount of time re-arranging the financial deck chairs, the Edcon board recently noticed it hadn’t actually got around to addressing the issue of its diminishing numbers of customers. Too late.
Surely Edcon has had enough trips to the bailout trough?
In the months ahead there will be far more worthy candidates in the very long queue to that trough, companies that have the energy and drive to succeed in the post-Covid world.
Certainly we must assist Edcon’s local suppliers and employees, but this 90-year old retailer must be allowed to pass on.
The old adage about never letting a crisis go to waste could prove to be the driving force of the country’s remuneration committees in the coming months.
How remarkably sharp of Mpact, the largest paper and plastics packaging business in southern Africa, to use the opportunity presented by the Covid-19 mauling of share prices to issue millions of performance shares to its executives. The R10.52 at which the shares were issued was the lowest level at which the share traded in over five years. The shares vest in 2023 and, at that stage, will no doubt generate eye-watering profit for the lucky executives.
It’ll likely be the same for some lucky Nedcor executives. In the last week of March the bank bought up a shedload of shares when the price was at a more than five-year low and allocated them to executives at that knock-down purchase price of R83.36 a share.
And of course if the market looks like it mightn’t move in your favour, you could do what RCL Foods is planning, or rather what its generous parent Remgro is planning. It’s proposing a specific repurchase of the share awards that were made to executives three years ago.
That’s such an appallingly bad idea, not least because RCL has performed so poorly its executives should be given no incentive to hang around a moment longer.
Of course remuneration committees will remind us, with varying degrees of indignation, that with all the closed-periods, there are limits to the times when they can buy or sell shares.
Well, phooey to that.
Perhaps to show they’re not being crass opportunists they could undertake to match every rand of profit made on share allocations with a rand donation to the Covid-19 Solidarity Fund. That fund will be needed for years after the crisis abates.
Otherwise people might get the feeling we’re not all in this together.
Also on the issue of executive pay, the remuneration reports recently released by MTN and Absa are a reminder of just how bizarre the logic behind paying executives such huge sums of money is.
“We have to pay them a load of money or they will leave” is the ridiculous patter from spineless board members.
Turns out MTN and Absa paid their ‘leaders’ so much there was little point in hanging around. Why would you when you’ve banked enough money to ensure even your great-grandchildren will live well?
On the issue of departing CEOs, who would have thought Sanlam needed to bring in an outsider to take over from outgoing Ian Kirk? No doubt Paul Hanratty has a solid CV; he was chair of Old Mutual SA from 2010 to 2016 and has served on the boards of Nedbank and MTN. But surely you don’t have to dig too deep to find great leadership talent within Sanlam? Anton Gildenhuys is just one name that springs to mind. Meanwhile the very very long-serving Johan van Zyl, who has dominated the life insurer’s leadership for most of the last 20 years, slips from chair into a non-executive title.
Perhaps some things don’t change so much, even in wretched times.