Astral chair finally gets well-deserved reward
Theuns Eloff, the nonexecutive chairman of poultry giant Astral Foods, will no longer be out of pocket.
On Thursday sanity prevailed at Astral’s reconvened general meeting, where shareholders overwhelmingly approved Eloff’s (dare we say, modest?) remuneration package of R1.1m.
In April Astral found itself in the awkward position of not being able to pay its nonexecutive chairman after shareholders at a general meeting voted against a resolution to approve Eloff’s remuneration package.
This general meeting was held after shareholders voted down the relevant special resolution around Eloff’s remuneration at an annual general meeting in February 2018.
It would have been a travesty if Eloff was out of pocket since Astral has enjoyed one of its best financial years, with profits booming and shareholders being rewarded with a bumper dividend. Thursday’s general meeting was in stark contrast to the last assembling of shareholders. About 27.6-million shares — or 71% of Astral’s issued shares — were voted with 99.8% in favour of the resolution to remunerate Eloff.
The shareholder response shows considerable support for Astral’s board and the group’s strategy of being the lowest-cost poultry producer in Africa.
Most market watchers suspected the previous votes represented mainly offshore investors who took a default position on remuneration rather than them having any particular beef with Eloff.
Of course, executive remuneration has become an increasingly contentious topic over the years, particularly generous packages offered to nonexecutive directors who don’t add value. But Eloff is considered an astute and wellinformed director, and a nonexecutive who has added considerable value to Astral’s laudable efforts at maintaining a no-frills operational culture.
The massive oversupply of office space presents SA with an opportunity to rectify the pitiful spatial planning of the past. Mixed-use nodes are few and far between in SA, where developments tend to be purely commercial or entirely residential, leading to long commutes in cities that already have a severe dearth of public transport. There are not enough homes close to places of work – particularly for the poor.
Perhaps it is time to make the most of the struggling office sector. The national office vacancy rate was 11.5% at the end of the first quarter of 2018, according to the South African Property Owners’ Association. That means more than one in 10 offices is vacant – a huge amount considering the endless office developments taking place between Johannesburg and Pretoria, and elsewhere.
Surely it is time to convert a large chunk of “B- and C-grade” offices into residential apartments? JSE-listed Octodec Investments has set a good example of how this can be done. But more attention needs to be given to this opportunity, even in nodes such as Sandton, which is simply one giant, snazzy office development. Plus, converting old offices into housing and retail space could reduce the traffic problem and even add a bit of energy into the otherwise soulless finance hub. Sandton could learn a lot from nearby Rosebank, which seems to have got the mixed-use model right.