Bekker no shareholder darling at Naspers AGM

NASPERS is probably the very last large company on the JSE to disclose its AGM voting record. For whatever reason, the company hung on until the last minute, refusing to let shareholders or the public know anything more than a bland “all resolutions were passed with the necessary majority”. Then, last Friday, it had no choice. In terms of the JSE’s amended listings requirements, it was obliged to provide the detailed results following its AGM.

It’s been just under a year since the amendment came into effect, and in that time it has become apparent how useful the detailed information is. So you have to wonder about the board of a company that insisted on taking advantage of the previous totally inappropriate disclosure regime. Particularly a company that is in the business of providing platforms for people to communicate and transact.

Behind the cloak of secrecy, it was assumed for years that voting patterns at Naspers’s AGM were as dull and predictable as the AGMs themselves. But the first detailed results suggest that Naspers’s shareholders are quite engaged and almost unpredictable.

The first surprise was that 7% voted against Koos Bekker’s appointment as a nonexecutive director and chair, compared with “negative” votes around 1% to 2% for the other directors. It’s likely this bloc of shareholders is concerned about the corporate governance implications of a formidable and long-running CEO transferring into the chairman’s role, even after a year’s absence from the group.

The 15% vote against the company’s remuneration policy was less surprising; voting on this non-binding resolution tends to be used by some shareholders to demonstrate they are engaged in the process.

The 23% vote against approval for placing unissued shares under the control of directors is significant, as were the 13% vote against issuing shares for cash and the 13% vote against amendments to the MIH trust deed and the Naspers share incentive trust deed.

All in all, a more nuanced shareholder response than expected, which is perhaps why it was kept under wraps for as long as possible.

There seems to be no relief in sight for Glencore. Indeed, things are likely to get considerably tougher before they get any better. This week, global ratings agency S&P downgraded its outlook for Glencore from stable to negative. “Continued weakness and volatility in commodity prices, resulting notably from a more uncertain and challenging outlook in China, may put additional pressure on operations, credit measures and free cash flow,” said S&P.

The agency has said Glencore must cut back on its hefty debt load and warned that a sizeable acquisition by Glencore could trigger the credit rating downgrade. This may end any plans the Swiss-based commodities and mining giant had to resuscitate a takeover bid that Rio Tinto rebuffed last year.

The share was listed with much fanfare four years ago, making instant billionaires of many of its senior executives. CEO Ivan Glasenberg not only became ridiculously rich but quickly assumed a reputation for being a canny dealmaker.

Perhaps the canniest deal he did was the timing of the IPO, almost at the peak of the commodity cycle. This allowed prelisting shareholders to make huge profits on selling parts of their holdings. Initially, it also provided Glasenberg with valuable currency for doing more deals. But the share price has been on a long-term downward trajectory; it’s trading at around a third of its listing price.

Glasenberg has taken to blaming hedge funds and speculators for driving the share price lower. True or not, it does make him sound worryingly like the Chinese government officials trying to maintain control of that country’s equity market.

While voting against remuneration policies has become quite common at shareholder meetings, much less common is voting against amendments to share incentive plans. This not only sends out a message, which may or may not be heard, but it forces a change in planned behaviour. It is extremely rare.

But it happens. This week, 30% of shareholders at Texton Property Fund voted against approving amendments to the Texton share incentive plan and prevented the resolution from being carried. The plan would have seen an increase in the shares available to the executive share option scheme. Why the executives felt they deserved additional reward is puzzling, given they have a management contract to manage the fund.

Shareholders have come to expect solid performances from this farmers’ retailer and, for a long time, the share price (on an unlisted trading platform) reflected this performance. But the slump in the share price must conjure up fears that the opportunistic PSG-controlled Zeder Investments is waiting to pounce. This is why there are growing calls for management to seek a more secure home on the JSE rather than leave shareholders exposed to the machinations of Zeder.