Min­ing big­wigs take pay cuts

Finweek English Edition - - INSIDE -

It’s no co­in­ci­dence that when it comes to form­ing a eu­phemism, more has been done to par­lay wages than in most other ar­eas of hu­man ex­pe­ri­ence. Af­ter all, what you earn is the most bru­tal, boiled down, de­scrip­tor of worth, or so it has be­come.

More so in the cor­po­rate world where ‘re­mu­ner­a­tion’, ‘emol­u­ments’, ‘com­pen­sa­tion’, ‘ di­rec­tor’s fees’, and ‘stipend’ are em­ployed to del­i­cately de­scribe to in­vestors the rather in­del­i­cate fact that some peo­ple get paid a heap-load.

In the min­ing sec­tor, the lens through which South Africa’s pro­found eco­nomic inequal­i­ties are fre­quently viewed, the fact that work­ers get paid peanuts com­pared to the ex­ec­u­tive class has be­come the num­ber one ch­est­nut for union bosses and Govern­ment of­fi­cials alike.

The CEO of Gold Fields, Nick Hol­land, was re­cently the tar­get on re­peated at­tacks for hav­ing col­lected R45m in salary and shares. (He now faces un­com­fort­able ques­tions re­gard­ing the pro­bity of an em­pow­er­ment deal at the group’s South Deep mine where a re­cent in­ves­ti­ga­tion found the com­pany guilty of bribery of an ANC of­fi­cial.)

It’s be­cause the is­sue of ex­ec­u­tive pay has be­come so hotly dis­cussed that cor­po­rates are find­ing new ways to re-align the

in­ter­ests of highly paid ex­ec­u­tives with share­hold­ers, and stake­hold­ers in gen­eral.

In the case of two ju­nior min­ing com­pa­nies, Con­ti­nen­tal Coal, a com­pany listed in Aus­tralia but which op­er­ates in Mpumalanga, and Mwana Africa, which op­er­ates in Zimbabwe and SA, the re­spec­tive boards have just cut salaries and fees.

For Mwana Africa, the CEO Kalaa Mpinga, for­merly of An­glo Amer­i­can, waived his £330 000 bonus and cut his salary 25%, while di­rec­tor’s fees were slashed 50%. Some $2.6m was saved.

This didn’t stop UK bro­ker SP An­gel f rom ob­serv­ing caus­ti­cally t hat t he ap­point­ment of for­mer DRDGold CEO and ex­ec­u­tive chair­per­son, Mark Welles­ley-Wood, to the chair of Mwana Africa un­did the firm’s gov­er­nance ef­forts, and was a rip-off of share­hold­ers to boot.

“Why would a com­pany take on a char­ac­ter who pre­vi­ously presided over a fail­ing high cost African gold miner, while en­joy­ing the ben­e­fits of an ex­ces­sive salary at the vast ex­pense of share­hold­ers and the com­pany” said SP An­gel’s John Meyer. SP An­gel later mod­i­fied its view. Welles­ley-Wood was “the right

Nick Hol­land

Kalaa Mpinga Mark Welles­leyWood

Pa­trice Mot­sepe

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