More votes against Reunert’s pay policy
Electronics group Reunert has been a reliable performer, never quite dazzling but also never skirting disaster as so many of its former Barlow Group stablemates have. Perhaps it was because Reunert was part of Barlow for only 10 years so grim management practices didn’t settle in.
Reunert was once included in the Top 40 JSE all-share index, but that lofty status was lost a long time ago.
The absence of any excitement may explain why the share price has been trapped in a R60R80 band for the past five years. In that period, it reached a peak of R85 in March 2013. It is trading at R75.29 and is on a dividend yield of 6.3%.
The executives haven’t done too badly out of it. CEO Alan Dickson received R11.5m for basic and performance-related pay in 2017. In addition, his conditional share plan had a fair value of R3.6m. This represents a slight reduction on what he was awarded for 2016.
The reduction might have been done in the hope of avoiding the substantial “no” vote the remuneration policy received at the annual general meeting in 2017, when 27.51% of shares voted against the policy. If so, it didn’t work. At Monday’s annual general meeting the no vote increased to a daunting 42.09%.
The PIC, which holds 11% of Reunert, was likely among the no voters again. In 2017 it said it voted against the policy because it was inconsistent with best practice. “There is lack of disclosure of specific weightings for the key performance indicators,” said the PIC.
Shareholders have been invited to engage with the company as is recommended by the King IV report and there’s a teleconference on March 1 to discuss the matter.
The resignation of Taste CEO and co-founder Carlo Gonzaga on Monday came as no surprise.
There is a new boss in town and he goes by the name of Riskowitz Value Fund (RVF). In the past few weeks we saw the new majority shareholder kicking out four board members and replacing them with industry veterans, two of which are closely associated with RVF.
It sealed the deal by replacing Gonzaga with nonexecutive director Tyrone Moodley, who has served as a senior adviser to Protea Asset Management LLC, the investment adviser at RVF.
While analysts reckon the “reshuffle” could save the company, some believe Moodley is not the one to bring the flavour back to Taste. “He is only an asset manager,” one analyst said, which signalled that a permanent CEO could possibly be brought into the fray at the end of Gonzaga’s six-month handover period.
But what kind of CEO would revitalise the cash-strapped company? Taste’s food brands are aimed at the large low to middle-income consumer segment, as well as middle and upper-income consumers with its product categories in coffee, chicken, pizza, fish, breakfast and burgers.
One of the fundamental mistakes Gonzaga made was forcefeeding American brands Domino’s Pizza and Starbucks down the throats of sceptical South Africans too quickly. Although local consumers will try out any new fad, the momentum often cannot be sustained.
As ambitious as Gonzaga’s plans to open 200 stores countrywide was, Taste needs a CEO with a nuanced understanding of the fast-food sector and who will focus on existing operations and generating cash for the retailer.