DIS­SENT AMID bonuses

Tiger Brands’ chair­per­son main­tains huge pay­outs are nec­es­sary to at­tract and re­tain top tal­ent

CityPress - - Business - JUSTIN BROWN justin.brown@city­press.co.za

The R34 mil­lion in bonuses paid to Tiger Brands’ new CEO and two top ex­ec­u­tives were jus­ti­fied, the com­pany’s newly ap­pointed chair­per­son, Khoso Mokhele, said in an in­ter­view this week. Lawrence MacDougall, who joined Tiger Brands in May last year, was paid a R20 mil­lion sign-on bonus. Noel Doyle, now Tiger Brands chief fi­nan­cial of­fi­cer, was paid a re­ten­tion bonus of R10 mil­lion, while Grat­tan Kirk, who is the group’s busi­ness ex­ec­u­tive of con­sumer brands, was paid a re­ten­tion bonus of R4 mil­lion.

“The bonuses were cer­tainly jus­ti­fied ... When you go look­ing for the kind of per­son that you need to be CEO of a com­pany like Tiger Brands ... you find them be­ing suc­cess­ful in ... an­other com­pany,” Mokhele said.

“There are el­e­ments of their re­mu­ner­a­tion and ben­e­fits that they for­feit. You will not, in this day and age, pick up a new CEO from out­side and not have to com­pen­sate [them] for what they for­feit when they leave the com­pany that they have been work­ing for ... Other­wise, how do you at­tract [some­one] to a com­pany like this?” he asked.

Turn­ing to the re­ten­tion bonuses paid to Doyle and Kirk, Mokhele said that they weren’t “nec­es­sar­ily” in the run­ning for the CEO po­si­tion, but they were re­tained be­cause they were “deemed by the board” to be key in­di­vid­u­als in keep­ing the com­pany as “set­tled as pos­si­ble” dur­ing the tran­si­tion from one CEO to an­other.

On a re­lated note, at the re­cent Tiger Brands an­nual gen­eral meet­ing (AGM), only 54% of Tiger Brands’ share­hold­ers backed the com­pany’s re­mu­ner­a­tion pol­icy, down from an 89% back­ing at the 2016 AGM.

Mokhele agreed that the vote in­di­cated share­holder dis­sat­is­fac­tion.

He said that the Tiger Brands board had not yet met with any share­hold­ers who had voted against the re­mu­ner­a­tion pol­icy res­o­lu­tion.

“Firstly, you need to iden­tify who those share­hold­ers are, but we are in the process of driv­ing an en­gage­ment. We have not yet had ses­sions with any. It is some­thing that I and the chair­per­son of the re­mu­ner­a­tion com­mit­tee [Santie Botha] have availed our­selves to do.”

At the end of March, Tiger Brands’ board would be hold­ing a strat­egy ses­sion that would in­clude a look at the com­pany’s strate­gic re­view.

“The CEO and his team are quite busy pre­par­ing ma­te­rial for that ses­sion.”

After MacDougall joined Tiger Brands, he started a strate­gic re­view and the re­sults of this are set to be re­leased in April or May.

Mokhele said that MacDougall had been brief­ing the board on a “reg­u­lar ba­sis” on where the re­view was lead­ing.

The ap­point­ment of MacDougall has been crit­i­cised as a sign that trans­for­ma­tion was go­ing back­wards.

In Novem­ber last year, Ajay Lalu, Black­Lite man­ag­ing di­rec­tor, said at an event by the As­so­ci­a­tion of Black Se­cu­ri­ties and In­vest­ment Pro­fes­sion­als, which is part of the Black Busi­ness Coun­cil, that: “We are clearly re­gress­ing, in par­tic­u­lar at top man­age­ment lev­els. Re­cent ap­point­ments of CEOs of large listed com­pa­nies such as MTN, FNB and Tiger Brands are a lead­ing in­di­ca­tor that ap­pro­pri­ate suc­ces­sion plan­ning is not im­por­tant, but sat­is­fy­ing the mar­ket is more im­por­tant.”

Mokhele said that the Tiger Brands board was “un­wa­ver­ing in our com­mit­ment to the trans­for­ma­tion of our so­ci­ety”.

“Iden­ti­fy­ing an in­cred­i­bly ca­pa­ble in­di­vid­ual to lead a com­pany can­not and should not be read as in­dica­tive of the com­pany’s lack of com­mit­ment to trans­for­ma­tion.

“He may be white, but I can tell you, his pas­sion and com­mit­ment for trans­for­ma­tion is un­matched by many.”

On the topic of trans­for­ma­tion at Tiger Brands, Mokhele said that he wasn’t happy with the state of trans­for­ma­tion at Tiger Brands.

“I’m happy with the com­mit­ment to trans­for­ma­tion, but it is a jour­ney that we are now on. I’m sure any self-crit­i­cal en­tity will be­lieve it can do bet­ter than it is do­ing.”

Turn­ing to the role of chair­per­son, Mokhele said: “The chal­lenge of be­ing chair­per­son of Tiger Brands is some­thing you ac­cept soberly. I cer­tainly hope that the faith and trust that was placed in me will prove de­served.

“I’m look­ing for­ward to this role as the chair­per­son of Tiger Brands.”

Turn­ing to his plans as chair, Mokhele said: “This is a well­go­v­erned com­pany in many ways ... There is a need to make sure that the board pre­sides over an eth­i­cal com­pany that is a good cor­po­rate ci­ti­zen ... In this day and age, post-En­ron and after the 2008 fi­nan­cial and eco­nomic col­lapse, boards no longer pay lip ser­vice to all th­ese chal­lenges. This is the kind of com­pany I would like Tiger Brands to be.”

NEW BROOM Tiger Brands chair­per­son Khoso Mokhele

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