Ex-PPC boss gets R23m
GROUP: FORCED INTO ATYPICAL FIX FOR SHARES VESTED FROM ONLY 2024
The amount was unrelated to his salary in plan made days before leaving.
The former CEO of cement producer PPC, Roland van Wijnen, whose contract ended on 31 December, received a “pay-out” of R23.5 million just four days before departing the group.
The amount was unrelated to his normal salary, but in the form of shares under the group’s incentive plan that would’ve only vested from the middle of this year onwards. However, because his contract was up, the group decided to “ignore” this requirement and instead “accelerate” the vesting of the shares.
This is unusual as departing executives tend to forfeit any unvested shares received under remuneration incentive plans.
Van Wijnen was granted a total of 6.2 million shares under PPC’s long-term incentive plan (LTIP) in its 2022 and 2023 financial years. The group’s remuneration policy explains that shares awarded under the LTIP are “subject to a three-year holding and vesting period” and that the so-called “payment year” follows in year five.
In terms of this policy, only year one of the three-year vesting period had been met for the 2.9 million shares awarded in July 2021. For the 3.3 million awarded in July 2022, the threshold of the first year of vesting had not even been reached upon Van Wijnen’s departure.
It said the board’s “Reward and Talent Committee” (basically the remuneration committee) “resolved to accelerate the vesting date of these PPC Shares in terms of the rules of the LTIP” as the performance criteria had “been met” by Van Wijnen during his tenure.
Van Wijnen’s main accomplishment as CEO (he joined the group in September 2019) was to restructure the group’s large debt pile.
He also had to fix some glaring governance and financial reporting issues. There were major delays to its financial reporting in 2020 as it worked to fix large accounting errors in prior year results and restate these numbers.
The acceleration of the vesting of these shares to 27 December effectively means that the requirement for holding the shares was removed. Ordinarily, these two awards would’ve only completely vested in mid-2024 and mid-2025.
The 6.2 million shares in the group, valued at R23.5 million (at a share price of R3.79 as at that date), were distributed to Van Wijnen at the tail end of 2022.
At the current market price (closer to R4), the shares are worth over R24 million. This is close to double Van Wijnen’s annual salary, excluding any incentives.
In 2023, his “total cost to company” was nearly R11 million, comprising a salary, car allowance, accommodation expenses and cellphone allowances. He also received cash incentives of R2.7 million.
Van Wijnen, a Dutch national, joined PPC as CEO following a nearly year-long search to replace Johan Claasen who took early retirement.
On joining the group, he also received a sign-on award of 1.3 million forfeitable shares without performance conditions. These vested on 1 October 2022. Until his departure, Van Wijnen had not disposed of any of these. At current prices, these are worth around R5.1 million.
Van Wijnen has no doubt returned to Europe. The value of his LTIP and sign-on shares together? Not even €1.5 million (about R30.7 million).
His contract ended on 31 August and was extended to 31 December to “facilitate an appropriate handover and transition” to replacement Matias Cardarelli, who started on 1 December.