STEINHOFF CALAMITY
Shares rise on the JSE following reports of rejection of bonus payments to board
STEINHOFF International rose on the JSE yesterday after its supervisory board succumbed to growing public pressure on the payment of bonuses to some members of the board.
The share price was up by 3.64 percent to R3.13 a share in early trade – from Wednesday’s closing price of R3.02 a share – before closing 1.66 percent higher at R3.07.
The group said its supervisory board took note of the concerns raised by stakeholders and has decided to delete sections relating to additional payments for independent directors from the resolution on director remuneration which is to be considered at the company’s annual general meeting (AGM) to be held on April 20.
Steinhoff was set to pay Steve Booysen and Heather Sonn an additional €200 000 (R2.91 million) each. Johan van Zyl was due to be paid €100 000.
The directors were appointed to the supervisory board after the group admitted to accounting irregularities in December, which led to a 90 percent decline in Steinhoff International share price and a loss of more than $12 billion (R142.34bn) in market capitalisation.
Former chief executive Markus Jooste resigned after the scandal, while former chairperson Christo Wiese also stepped down later to be replaced by Sonn as an acting chairperson of the group.
Last week parliamentarians Joanmariae Fubbs and Yunus Carrim raised their concerns and appealed to the Steinhoff board not to pay bonuses or halt them until a future date.
The DA’s David Maynier yesterday said the remuneration proposals were grotesque and should have been withdrawn completely.
“This is simply a tactical retreat, because the proposal for additional remuneration has not been withdrawn and will be referred to the new supervisory board, which will be appointed at the AGM,” Maynier said.
Steinhoff also released a statement yesterday, explaining that it would delete the resolution for the bonuses and would instead refer the proposals to the new supervisory board to be appointed at the AGM.
The supervisory board said these directors, who were not permanent employees, committed themselves, outside the scope of work of non-executive directors, some on an almost daily basis since the crisis over accounting irregularities enveloped the company in December 2017.
The board also stressed that the basic fees proposed for directors were determined after the board had taken professional advice, which it had followed.
Sonn said the changes had been made at the request of the directors concerned, who did not want the proposal to detract from other critical matters that had to be considered at the AGM.
“There has been a lot of adverse comment and criticism about these proposals, much of it based on a misunderstanding of what was being proposed and why the supervisory board felt the payments were warranted,” Sonn said.
She added that shareholders raised concerns, and the issue threatened to become a distraction from the main objective of repositioning the retail giant as a stable operation that would deliver a controlled restructuring programme in the interest of all stakeholders.