Richer pick­ings

Finweek English Edition - - COMPANIES&MARKETS - SVET­LANA DONEVA svet­lanad@fin­

DIREC­TORS’ RE­MU­NER­A­TIONS fre­quently pro­vide for juicy fod­der in a com­pany’s an­nual re­port. African Oxy­gen (Afrox’s) most re­cent doc­u­ment is no dif­fer­ent. The gases and weld­ing prod­ucts gi­ant dom­i­nates the South African mar­ket but is in­creas­ingly find­ing its po­si­tion com­pro­mised due to price-cut­ting com­peti­tors. Afrox has had a dif­fi­cult time fi­nan­cially, with rev­enue and earn­ings (EBITDA) hav­ing de­clined for the fourth con­sec­u­tive year but it’s spend­ing more on its ex­ec­u­tive pay pack­ages.

The to­tal re­mu­ner­a­tion paid to the group’s direc­tors – six non-ex­ec­u­tives and four ex­ec­u­tives – over its 2010 fi­nan­cial year was R17,5m, which strikes us as a sur­pris­ing fig­ure, given 2009’s com­par­a­tive num­ber of R9,4m and the fact that the group it­self ad­mit­ted it had “en­dured set­backs in re­cent times, all of which have been re­flected in the bot­tom line” (Fi­nan­cial di­rec­tor’s re­view 2010). Yet all in­creases and re­wards are per­for­mance-based, ac­cord­ing to the chap­ter in the re­port de­voted to hu­man re­sources. The big­gest time-com­pa­ra­ble in­crease was borne by MD Tjaart Kruger, who re­ceived a 45% in­crease on his R5,2m to­tal salary in 2009.

Also in­ter­est­ing is that Afrox cut staff over the pe­riod. Ac­cord­ing to its value-added state­ment for 2010, the num­ber of per­ma­nent em­ploy­ees at the group was re­duced to 3 434 from 3 558 in the pre­vi­ous year, while the num­ber of short-term and con­tracted work­ers shrunk from 119 in 2009 to 46 in 2010, mean­ing rev­enue per av­er­age per­ma­nent em­ployee in­creased by 9%.

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