Axed CEO’s R68m loss
OLD MUTUAL: SHARE OPTIONS FELL AWAY WHEN PETER MOYO WAS FIRED
Peter Moyo lost out in share options when his employment at Old Mutual was controversially terminated.
Group says no termination benefits are under consideration.
Peter Moyo lost out on R68.4 million in share options when his employment at Old Mutual was controversially terminated over an irreconcilable conflict of interest last year.
Just over R13 million of the former CEO’s options were deducted from his 2018 remuneration package, previously valued at R50.5 million but restated to R37 million in the group’s latest annual report.
During the insurer’s annual general meeting (AGM) on Friday, Itumeleng Kgaboesele, chair of the remuneration committee, assured shareholders that Moyo had not received any termination benefits and none were under consideration. Moyo’s total remuneration package in 2019 was R10.2 million, which included just over R1 million as payment in lieu of leave.
The group’s annual report reveals options that had been issued to Moyo as part of his longterm incentives in 2017, 2018 and 2019 – which had been due to be taken up in subsequent years – lapsed when his employment was terminated.
Legal bills
Moyo is also facing a hefty legal bill following the high-profile court action he took against Old Mutual after he was suspended and then fired by the company.
To date, judges have awarded cost orders against Moyo in two of the cases.
Old Mutual chairman Trevor Manuel told shareholders on Friday the board could not yet say what the full cost of last year’s legal battle with Moyo had been, as the matters had not yet been finalised.
“There are two parts to what it costs, on the one hand no company wants to be in the press for reasons of litigation but it was a set of circumstances we found ourselves caught up in.”
Manuel said the legal battle was not something the board chose: “We couldn’t abandon it because we knew we stood on very firm legal grounds … the initial decision to suspend and then terminate the employment of the former CEO was done on very, very firm ethical grounds.” The group’s legal counsel, Craig McCloud, added that once the legal battles are finalised: “We will proceed with steps to recoup our costs.”
Guarding against repetition
And so, for the second year in a row, the dark shadow of the former CEO hung over the insurer’s AGM with much of the discussion between the board and shareholders related to what is referred to as the “Moyo debacle”.
Concerned investors were keen to know what steps had been taken to ensure there would not be a repetition of the court battle that dominated media coverage of the group for much of 2019.
Manuel explained that the current Old Mutual board had been appointed in 2017 and had inherited the Moyo governance issues.
“Apart from maintaining a committee called the ‘related parties transaction committee’ this board will make very sure there is in fact a very clear separation between the interests of employees and directors and those of the company,” Manuel said.
We knew we stood on very firm legal grounds