Showing the money
More is needed than just the bare bones of how a listed firm pays its executive directors
Fifteen years after listed companies were first required to disclose details of their executive directors’ remuneration, Coronation Fund Managers has still been providing only the bare bones. The pay of the two top executive directors and reference to the 30% of annual group pretax profit that is allocated to a bonus pool is the gist of what shareholders have been getting. In lieu of a statement of remuneration policy, shareholders have been told “the bonus pool is utilised to incentivise and retain staff in accordance with their performance and contribution to the business”.
No mention of who the three top-paid executives (who are not on the board) are and how much they have been paid.
But now, at last, Coronation has promised to reveal its remuneration policy. It will be on show in its next annual report, due out in November.
Extracting that promise has taken almost two years of dogged engagement by shareholder activist Theo Botha.
Botha, who is nothing if not determined when he takes up an issue, reached such a state of exasperation he felt forced to engage a legal firm to help him in his battle.
That this should have been necessary reveals the extent to which, for all the talk to the contrary, robust shareholder engagement is reserved for the well resourced.
After the January 2016 annual general meeting Botha presented Coronation CEO Anton Pillay with a request in terms of the Promotion of Public Access to Information Act (Paia) for the company’s remuneration policy.
In early February Pillay replied to Botha, saying that while he respected his rights as a shareholder he felt Botha had not satisfied the Paia threshold requirement.
At that stage Botha realised he needed the help of a lawyer.
On July 26 — in response to a letter from Adam Pike of Pike Law, acting on behalf of Botha — Coronation said it would be “disclosing its remuneration policy in its next annual integrated report”, due out in November.
Coronation’s previous attitude is difficult to explain, given that even die-hard intransigents like Caxton have bowed to the inevitabilities of 21st century life as a listed company and made the necessary (and appropriate) disclosures.
Two other, much smaller, listed fund managers, Sygnia and Anchor, also thought they should be allowed to play hard and fast with governance recommendations about remuneration. But they opted to be more forthcoming after Botha harangued them at their annual general meetings.
The U-turn by Coronation raises two obvious questions: why was the fund manager so determined to keep the details of its remuneration policy secret, and what happened between February 10 this year and July 26 to change its mind?
Coronation has said it doesn’t want to add any further comments at this stage.
Given the level of secrecy that shrouds the issue, it’s likely those questions will forever remain in the shadowy realm of speculation and conspiracy. Few outside the fund management industry any longer accept
‘‘ INDUSTRY PLAYERS DON’T NEED TO SEE THE POLICY; THEY KNOW WHAT’S IN IT — THEY SEE THE FANCY HOUSES AND CARS. THE ONLY ONES WHO DON’T KNOW ARE THE PUBLIC THEO BOTHA