Sovereign bosses go the route of sacrifice

Sovereign Foods’s executive committee members have voluntarily agreed to waive their rights to a R6.1m incentive that helped to stir up a shareholder revolt, which led to last year’s hostile bid by Country Bird.

In Sovereign’s annual report, chairman Tom Pritchard and CEO Chris Coombes said the executive committee members have not only waived their rights to the R6.1m but also their rights to any benefits due under the previous remuneration policy.

The executives had placed their “trust in the hands of the board and ultimately the shareholders to develop an executive remuneration policy that will align their interests with those of the shareholders”, said Pritchard and Coombes. They said that the board welcomed and appreciated “this unselfish action by the executives”.

There are no long-term or short-term incentive plans in place for the executive committee members. One of the disgruntled former shareholders welcomed the move, but said the controversial scheme to provide bonuses for the executives should never have been implemented in the first place.

No incentives will be paid to the members of the executive committee in 2017. The operating performance was reasonably good in the context of an extremely challenging trading environment but management incurred R31m of legal and advisory fees in its effort to fight off the Country Bird bid.

While the operational performance helped lift the share price to a five-year high of R10.77, the R9 a share offer from Country Bird is a major underpin.

The offer can be resuscitated in September.