Van Dijk millions fuel Naspers pay debate

Naspers’s remuneration committee, which was recently criticised for the inappropriately generous remuneration given to CEO Bob van Dijk, has awarded him a long-term incentive with a fair value of $10.4m in financial 2017.

The long-term incentive, which is described as part of Van Dijk’s fixed pay, comes in addition to his $2.2m pay. During the year to end March 2017, Van Dijk took ownership of 284,031 Naspers N shares awarded to him as part of a previous remuneration package. These shares, which are the only shares owned by Van Dijk, had a market value of R795m on Friday.

He also picked up $8.3m in share appreciation rights during 2017. Chairman Koos Bekker has retained his 4.7-million Naspers N shares, which are now worth R13bn.

In June, Swiss-based investment adviser Albert Saporta described Naspers’s remuneration policy as “intellectually dishonest” in an open letter to the Naspers board.

Saporta was calling on the board to spin off the group’s enormously valuable 33% holding in Chinese-based internet group Tencent.

In the letter he said it was inappropriate to link the Naspers executives’ remuneration to Tencent’s performance as they had no influence over it. “They can just come into the office, open the newspaper to see what the price of Tencent is and then go play golf. Whatever they do is irrelevant to the stock, which only moves based on Tencent,” Saporta told the Financial Mail last week.

In his open letter, Saporta said that since Van Dijk had taken over in 2014, the value of the Tencent stake relative to Naspers’s market capitalisation had grown from 90% to 130%.

“Correspondingly, as implied by the market, the value of Naspers’s dozens of other investments and businesses has declined from a value of R34bn to negative R300bn.”

The 2017 results again highlighted Tencent’s dominance and the cash demands of Naspers’ e-commerce ventures. But the rate of investment in those ventures has slowed and some are reporting profits. Naspers’s management is adamant the discount will close.

On Friday, Saporta told Business Day he was still calling for a spin-off of Tencent and stressed “a spin-off is not a sale, it is a distribution to shareholders”.

He also called on the board to consider a secondary listing in Hong Kong.

Saporta questioned the executives’ commitment to the promise that the discount would close, given that the chief investment officer, Mark Sorour, recently sold almost R50m worth of shares.

THEY CAN COME INTO THE OFFICE, OPEN THE PAPER TO SEE THE PRICE OF TENCENT AND THEN GO PLAY GOLF