Why Moyo is demanding R250m from Old Mutual

If the four-month-long dust-up between Old Mutual and its axed CEO, Peter Moyo, continues with him not being reinstated, he is happy to walk away from the insurance group with a R250 million payout.

The R250 million claim for damages is contained in Moyo’s court papers that he served to Old Mutual on Friday for the second leg of his lawsuit, wherein he seeks to declare the nonexecutive directors, including Trevor Manuel, delinquent.

Moyo is also claiming damages from Old Mutual, saying his sacking has ruined his reputation and that he would probably “never get a job” in corporate SA.

Moyo’s first prize would be to return to Old Mutual and fulfil his CEO duties. At face value, a R250 million claim is extraordinary.

However, Moyo maintains that he would have been paid the amount if he had served the remaining four-and-a-half years of his employment contract with Old Mutual. He adds that the amount is also linked to his total remuneration package, which includes long-term and short-term incentives that are tied to his continued employment at the group since his appointment as CEO in June 2017.

In 2018, Moyo’s total compensation shot up by 32% to R50.5 million. The biggest contributor was a R15.4 million incentive awarded to him for being part of a team that completed the split of Old Mutual into four financial services businesses.

Apart from his R8.4 million annual salary, Moyo has longterm incentives, including Old Mutual shares worth more than R47 million at Wednesday’s close of R19.42 a share. He was also awarded additional long-term share-based incentives worth R12.6 million in March 2019.

The long-term incentives have a lock-in period up to 2022, meaning that Moyo would have to be employed at the insurer for the next three to four years to enjoy these benefits.

He has other deferred shortterm incentives, including performance bonuses, that are worth about R2 million.

In total, his long- and shortterm incentives are worth more than R60 million. When his annual salary is included in his total incentives, Moyo says he would have been naturally paid a figure close to R250 million by Old Mutual to serve his entire employment contract.