Coronation ahead in ‘war for talent’

• Asset manager gives 42% of its employees long-term incentives

Coronation, one of SA’s largest asset managers, is outperforming the sector in retaining its top talent, largely due to its ownership structure and incentives it has put in place to withstand the scramble for hires.

The Cape Town-based company, which has about R600bn in assets under management, maintained a stable global staff complement of 349 in the 2023 financial year, with turnover across the group of 4.5%.

The turnover is even lower at 2.5% for employees who receive long-term incentives. The group is 29% owned by employees, including its executive, with the rest of the stock in public hands.

To retain and attract top talent, the group gave 42% of its employees long-term incentives in the form of Coronation unit trusts and shares.

“In support of our long-term thinking and retention strategy, these recent allocations vest over 51 months, with 50% of the vesting commencing in January 2025 and split equally between January 2025, 2026, and 2027, with the final 50% vesting at the end of the period, in January 2028,” the money manager said in its latest annual report.

“Generally, the company aims to defer a minimum of 40% of total incentives. This outcome very clearly aligns the interests of employees with both clients and shareholders.”

To ensure staff stability the company, headed by Anton Pillay, has about 314 employees on extended notice periods ranging from two months to a year, while 86 employees have restraint of trade provisions, ranging from three to 12 months.

Pillay is among employees with a 12-month restraint of trade and 12-month notice period. The group’s CFO has a six-month notice period.

EMIGRATION

Momentum Metropolitan, one of SA’s largest financial services conglomerates, has flagged a lack of critical skills in the industry, partly due to emigration, as one of the risks facing the group. It also said the lack of critical skills has necessitated a “war for talent” in the sector.

In its latest annual report, Momentum said it is engaged in such a war, particularly for attracting and retaining actuaries and IT and technical skills.

“SA is facing an acute critical skills crisis, especially African, coloured and Indian skills, due to increased local and international competition and emigration,” the company said.

“We face the risk of skills shortages, particularly in critical skills such as actuarial, IT and technical talent. This has amplified in the evolving working environment. Talent retention, burnout and fatigue are all concerns, especially in specialist areas, and talent attraction remains challenging.”

According to the 2022 global talent competitiveness index, SA had an overall ranking of 77 out of 133 countries. It is ranked 55 when it comes to attracting skills but a lowly 88 in terms of retaining talent.

RETENTION

Coronation said that in a competitive industry the longterm retention of world-class talent is critical to the success of its business.

“For SA firms, retention has become a key challenge in an already scarce skills industry, as we see escalating levels of emigration.

“But it is not only push factors at play. The brain drain is being exacerbated by offshore firms

headhunting SA talent and offering attractive remuneration,” Coronation said.

“And it is not only investment skills that are in short supply and high demand.

“The burgeoning tech industry with its flexible, globalised work culture and deep pockets is luring information system and technology professionals and engineers, at a time when financial services companies are doubling down on technology spend and, specifically, cybersecurity.”

EXPERIENCED

The average tenure in Coronation s investment team is 11 years, ’making it one of the most experienced in the industry.

“Our business depends on our people’s ability to deliver long-term investment outperformance. Coronation is a meritocracy, where anyone (irrespective of position or title) is recognised for work well done,” Coronation said.

“Our flat structure ensures agility, fast decision-making and constant innovation.

“Dialogue and debate are encouraged, and we have an open-door policy where management is challenged on any aspect of the business.”

Since being listed on the JSE in 2003, the asset manager has returned more than R18bn to shareholders.