In­vestec’s top ex­ecs did strike it rich

The Star Early Edition - - BUSINESS REPORT - Ka­belo Khu­malo

IN­VESTEC’s an­nual re­port on Fri­day showed that its top four ex­ec­u­tives were paid a com­bined £19 million (R322.83m) in salaries, bonuses and other ben­e­fits in the 2016 fi­nan­cial year, up from the £17.8m they pock­eted from the pre­vi­ous year, thus dwarf­ing the pay of their in­dus­try peers.

Lead­ing the way was the group’s head of the As­set Man­age­ment (IAM) unit, Hen­drik du Toit, whose to­tal com­pen­sa­tion com­prised of a £4.6m bonus and £440 950 in gross re­mu­ner­a­tion.

The group’s chief ex­ec­u­tive Stephen Kos­eff ’s to­tal re­mu­ner­a­tion came to £4.8m, which in­cludes an gross re­mu­ner­a­tion of £1.4m, a bonus of £1.9m, long-term in­cen­tive awards of £1.4m, while the com­pany’s man­ag­ing di­rec­tor Bernard Kan­tor’s to­tal pay also amounted to £4.8m, in­clud­ing a gross re­mu­ner­a­tion of £1.4m, a bonus of £1.9m and long-term in­cen­tive awards of £1.4m.

Glynn Burger, the group risk and fi­nance di­rec­tor, took home £4.3m, in­clud­ing a gross re­mu­ner­a­tion of £1.3m, a bonus of £1.6m and long-term in­cen­tive awards of £1.3.

Du Toit’s IAM unit grew its as­set un­der man­age­ment to £95.3bn in the pe­riod from £75.7bn in the cor­re­spond­ing pe­riod, while it posted op­er­at­ing profit be­fore non-con­trol­ling in­ter­est £164.8m, an in­crease of 22.3 per­cent and contributed 27.5 per­cent to group profit.

Bonuses

Perry Crosth­waite, the chair­per­son of the re­mu­ner­a­tion com­mit­tee at In­vestec, in the an­nual re­port, said that the com­mit­tee had ap­proved bonuses to ex­ec­u­tives In light of the pos­i­tive fi­nan­cial per­for­mance of the group dur­ing the 2017 fi­nan­cial year and the re­sul­tant progress achieved across a range of fi­nan­cial and non-fi­nan­cial and strate­gic mea­sures.

“Hen­drik du Toit was awarded a bonus of £4.65m, de­ter­mined solely in re­la­tion to the per­for­mance of In­vestec As­set Man­age­ment 20 per­cent of the bonus awarded to Du Toit was de­ferred into the IAM De­ferred Bonus Plan,” Crosth­waite said.

Ex­ec­u­tive pay has been a bone of con­tention in South Africa as wage gap and equal­ity re­main stub­bornly high.

Ear­lier in the year, Busi­ness Re­port re­ported that Stan­dard Bank last year paid its top six ex­ec­u­tives a com­bined R209m in salaries, bonuses and other ben­e­fits, with group head of cor­po­rate and in­vest­ment bank­ing David Munro net­ting more than the com­pa­nies’ joint chief ex­ec­u­tives in the 2016 fi­nan­cial year.

Munro, who has since left to take on the chief ex­ec­u­tive po­si­tion at Lib­erty took home R45.2m in to­tal earn­ings for the year. His earn­ings in­cluded a ba­sic salary of R6.7m, an­nual cash re­ward of R12.9m, an­nual de­ferred award of R15.6m and R10m in per­for­mance re­ward plan.

The bank’s joint chief ex­ec­u­tives Sim Tsha­bal­ala and Ben Kruger earned R44.4m each. Ned­bank’s top 7 ex­ec­u­tives pocket R150m in salaries, bonuses and other ben­e­fits last year, with the com­pa­nies chief ex­ec­u­tive Mike Brown ac­count­ing for R36.7m of this.

Absa’s top 7 ex­ec­u­tives were awarded R114.4m in salaries and other ben­e­fits in the 2016 fi­nan­cial year, with chief ex­ec­u­tive Maria Ramos to­tal take home pay cheque amount­ing to R29.5m.

Tight­en­ing

The King IV Re­port on Cor­po­rate Gov­er­nance rec­om­mended the tight­en­ing of re­quire­ments on re­mu­ner­a­tion for com­pa­nies.

Last week, pro­fes­sional ser­vices firm Deloitte, re­leased its Ex­ec­u­tive Com­pen­sa­tion Re­port 2017 that cov­ered com­pa­nies in the JSE top 100, as at Septem­ber 2016.

Among other things, the re­port found that the ex­ec­u­tive com­pen­sa­tion in­dus­try has much to do in pro­vid­ing in­formed ad­vice and com­men­tary to all stake­hold­ers, such that the ex­ec­u­tive pay con­tro­versy is trans­lated into an in­formed de­bate towards a bal­anced and gen­er­ally sup­ported so­lu­tion.

“Chief ex­ec­u­tive to­tal an­nual com­pen­sa­tion grew from an ag­gre­gate base of R973m to R1.6bn, an in­crease in the in­dex to 167 per­cent. Dur­ing the same pe­riod, the in­dex of Share­holder Value grew to 176 per­cent, while that of the JSE all share in­dex grew to 155 per­cent. In con­trast, to­tal re­mu­ner­a­tion grew to only 119 per­cent.”

“By com­par­i­son, the in­dex of pay for the top two ex­ec­u­tives (chief ex­ec­u­tive plus chief fi­nan­cial of­fi­cer (CFO) com­bined) has grown to 177 per­cent, in­di­cat­ing pos­si­bly that CFO’s have been less pe­nalised by the im­pli­ca­tions of the re­cent bear mar­ket and a de­clin­ing growth in earn­ings,” Deloitte said.

Mark Bussin, ex­ec­u­tive com­mit­tee mem­ber of the South African Re­ward As­so­ci­a­tion, said that it was nec­es­sary to con­tex­tu­alise ex­ec­u­tive pay as its in­creases have been on par and in most in­stances lower than the gen­eral work­force.

In­vestec’s Hen­drik du Toit has re­ceived a £4.6m bonus.

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