Pick n Pay executives feel bonuses pinch

PICK n Pay’s remuneration committee may have set the scene for a tougher approach to executive rewards in the besieged retail sector with its decision not to pay a short-term bonus for the year to end February 2017.

The decision not to pay bonuses, as a result of poor turnover growth and failure to meet working capital targets, will hit the top executives hard.

For financial 2016, chief executive Richard Brasher received a short-term annual bonus of R15-million, taking his remuneration to R24.4-million. For 2017, Brasher received remuneration of R10-million and no bonus.

Executive director Richard van Rensburg’s pay dropped from R7.1million to R4.7-million, while finance director Bakar Jakoet’s fell from R6.6million to R4.8-million. Van Rensburg and Jakoet were both paid R2.5-million bonuses in 2016.

The group’s newly released 2017 annual report shows that while none of the senior executives received a bonus, discretionary bonuses have been paid to key staff at lower management levels. This was in recognition of progress delivered during a more challenging year, said remuneration committee chairman Hugh Herman.

Herman said that although the group had achieved a 17% increase in profit before tax and exceptional items, which was ahead of the 10% threshold target, it was short of its stretch target of between 20% and 25%.

Sasfin analyst Alec Abraham said withholding bonuses was arguably appropriate considering it had not achieved the sort of sales targets promised by Brasher some years ago.

One remuneration consultant described Pick n Pay’s move as encouraging and indicated the remuneration committee was taking its responsibility seriously.

“When trading conditions are tough executives have to be more keenly incentivised.” — BDLive