BHP Billiton streets ahead of Anglo American
BHP Billiton has consistently and massively outperformed its closest peer – Anglo American – over the past five years. Since January 2004 BHP Billiton has shown a cumulative 326% return on the JSE against Anglo’s 154%. On the London Stock Exchange the numbers fall to 220% for Billiton and a BHP BILLITON CE Marius Kloppers is R9m richer after exercising his options on 90 000 shares in the company and selling more than 43 000 of those to take care of the taxman. The shares in the mining company were awarded to Kloppers two years ago as part of the company’s incentive share schemes and are his reward for helping the company beat its peers in terms of performance over the period. negative 85% for Anglo.
The impressive performance by Billiton hasn’t helped Kloppers’s salary if Anglo CE Cynthia Carroll’s remuneration is used as a yardstick. Kloppers took home US$6,87m (R56m, excluding share options), while Carroll was paid in excess of R75m in both shares and basic salary over the past financial year (see Finweek, 7 May). The 90 000 shares (worth R17m) Kloppers exercised were the only ones due to him over the past financial year, with another 27 582 (R5,2m) vesting in August. However, that’s a pre-tax allocation and becomes about 40% lower post tax.
Kloppers’s remuneration consists of a 28% basic cash salary with the rest termed “at risk remuneration” linked to shareholder returns.
“Get out of the kitchen if you can’t take the heat.” It seems some of the directors at food producer Pioneer Foods are heeding that advice with respect to their personal investments in the company. A total 250 000 shares has been sold by three executive directors since the last week of May, with the latest in the second week of June. That just happened to be on the eve of SA’s competition authorities’ bread cartel and price fixing hearings against the company.
The Competition Tribunal has set aside 10 days to hear the matter from the second week
of June. If found guilty of illegal activity in alleged cartel activity – fellow accused Tiger Brands and Premier Foods have already owned up to their wrongdoings – Pioneer stands to lose a maximum 10% revenue for its 2007 financial year. Although it stands to lose up to R1,1bn it’s made no provision for any possible fine.
That the commission authorities have enlisted the help of individuals that would have conspired with Pioneer Foods to fix bread prices, employees of Tiger Brands and Premier Foods, with inside knowledge of the alleged offence, haven’t fazed Pioneer. “Independent legal advice… indicated a reasonable chance of a successful defence against all or some of the charges…” chairman Boy Blanckenberg stated in its 2008 annual report.
The executive director of the division that stands accused of the wrongdoing – Tertius Carstens, of Sasko – is the latest addition to the list of sellers of Pioneer Foods’ shares. Carstens sold 117 500 shares to raise R3,3m “in order to assist with the repayment of the debt related to the acquisition of the remaining 256 997 ordinary shares”. The options were awarded at a strike price of 865c/shares. As at 30 September 2008 (Pioneer Foods’ financial year-end) Carstens owned 123 668 shares in the company he’s served for 13 years.
The other (outright) sellers were CE André Hanekom and finance director Leon Cronjé, who sold 30 000 of his shares for R855 000 early in June. While Hanekom stated personal reasons for the sale of 100 000 shares, Cronjé didn’t give any reason for his sale of shares.
Although directors owned almost 2% of the company’s shares in September, investors might do well to remember that ever since Pioneer Foods listed on the JSE last year, the only time any of its directors bought its shares was through a rights offer a few months after listing.
Carstens was by no means the only seller of note last week. At construction group Stefanutti Stocks, non-executive director Bridgman Sithole sold 500 000 of the shares held by his Moputso Investments in the company to raise R5,9m. Moputso owns around 10% of Stefanutti Stocks. “People have to eventually make some money out of their investments,” says a Stefanutti director we spoke to. He confirmed the sale represented “only a tiny” part of Moputso’s shares in the company.
Above the rest. Marius Kloppers