GPI appointments ease shareholder worries

The boardroom of empowerment company Grand Parade Investments (GPI) is taking on a semblance of normalcy again.

Earlier in 2017, GPI, which owns the master franchise agreements for fast-food brands Burger King and Dunkin’ Donuts, as well as several Western Cape-based gaming investments, was rocked by a series of key resignations.

In April, Tasneem Karriem resigned as CEO, a position she had occupied for less than a year. A few weeks later chief financial officer Shaun Barends also exited the boardroom. This left GPI with just one executive in the boardroom — executive chairman and major shareholder Hassen Adams, who also doubled up as acting CEO.

This week’s announcement that Prabashinee Moodley is to take up the CEO position from August should go some way to placate worried GPI shareholders. Her appointment follows the recent appointment of Colin Priem as chief financial officer.

But what shareholders will relish is that Moodley is familiar with the fast-food industry, having held senior positions internationally at Dunkin’ Brands and McDonald’s. The GPI share price responded positively to Moodley’s appointment on Tuesday. But there is some way to go before the gaping discount the share price offers on GPI’s intrinsic value closes to more acceptable levels.

With Adams, who has been a dominant force at GPI for two decades, still retaining executive chairman status, there may still be some conjecture over who is really in charge at the company.

Perhaps it’s now time for Adams to step back and take on a nonexecutive role?

One of the most interesting sections of PwC’s annual remuneration report deals with how the large institutions vote on remuneration. The loud message from this section is that if you are interested in remuneration issues then neither Stanlib nor Investec should be managing your investments.

For the second year in a row Stanlib and Investec emerged as the asset managers most likely to approve a company’s remuneration policy. Both asset managers only voted against 6.5% of pay policies. Investec abstained in 10.4% of cases.

The people who appear to take the issue most seriously are Allan Gray and Old Mutual. The former voted against remuneration policies in 28.6% of cases and the latter in 37%. Unsurprisingly, the Public Investment Corporation is the asset manager most likely to vote against a remuneration policy. It notched up 44.9% “no” votes.

The prize for the “most improved” goes to Coronation. In 2017 PwC reported that Coronation voted in support of remuneration policies in a staggering 94.3% of cases. In 2018 that figure has been reduced to a more considered 77.6%.

But perhaps an even bigger issue that has been raised, albeit inadvertently, by PwC is the absence of Sanlam from the list of major institutional investors. The reason Sanlam doesn’t appear on the list is that it does not disclose how it votes at annual general meetings.

At Sanlam’s recent AGM, chairman Johan van Zyl did give shareholders an undertaking that it would “definitely look at” bringing its disclosure into line with industry standards.