Spur pay pol­icy re­jected again

Business Day - - Front Page - Nick Hed­ley Se­nior Busi­ness Writer hed­[email protected]

For the sec­ond year row, Spur Cor­po­ra­tion in a share­hold­ers have shot down the group’s pay pol­icy, this time with an un­prece­dented three-quar­ters of the vote.

For the sec­ond year in a row, Spur Cor­po­ra­tion’s share­hold­ers have shot down the group’s pay pol­icy, this time with an un­prece­dented three-quar­ters of the vote.

“This is a sign of the times — if you don’t per­form then you are go­ing to feel the weight of share­holder ac­tivism,” said in­vest­ment an­a­lyst Chris Gil­mour.

As many as 74.9% of votes cast at Spur’s an­nual gen­eral meet­ing (AGM) on Thurs­day were in op­po­si­tion to the group’s re­mu­ner­a­tion pol­icy.

The com­pany plans to hold an “en­gage­ment ses­sion” with share­hold­ers, mem­bers of its re­mu­ner­a­tion com­mit­tee and ex­ec­u­tive man­age­ment in late Jan­uary 2019.

In 2017, 51% of votes op­posed the pay pol­icy. Spur said after that AGM that in­vestors had been con­cerned that its longterm in­cen­tive schemes could re­ward “medi­ocre or non­per­for­mance”. They had also been con­cerned that not enough em­pha­sis was be­ing placed on the ef­fec­tive em­ploy­ment of cap­i­tal in de­ter­min­ing short­term in­cen­tive pay­ments.

Spur said in its 2018 an­nual re­port it had made var­i­ous changes to the schemes, though the changes ev­i­dently did lit­tle to ap­pease in­vestor con­cerns.

Spur’s ma­jor in­vestors in­clude Grand Pa­rade In­vest­ments, Fidelity In­ter­na­tional and In­vestec, ac­cord­ing to Bloomberg data. They have had to en­dure a sharp de­cline in the com­pany’s share price, which has fallen from a high of R39.76 in 2015 to R22.50 on Thurs­day.

Group CEO Pierre van Ton­der earned to­tal re­mu­ner­a­tion in the 2018 fi­nan­cial year of R6.2m, from R9.7m the year be­fore.

Gil­mour said that Van Ton­der had been a pop­u­lar CEO among in­vestors and within the group, though the com­pany had strug­gled as con­sumer spend­ing slowed. “They’ve gone through some re­ally tough times re­cently, as have all the fast food com­pa­nies.”

In the year to end-June, Spur’s restau­rant sales grew just 0.6%, while com­pa­ra­ble head­line earn­ings per share fell 9.5%.

Spur’s brands in­clude Spur Steak Ranches, Pa­narot­tis, John Dory’s and Ro­coMa­mas.

The group said in Septem­ber its mid­dle-in­come cus­tomer base was fac­ing “in­creas­ing fi­nan­cial pres­sure … with lit­tle re­lief ex­pected in the short to medium term”.

The group planned to in­crease mar­ket share through on­line food de­liv­ery and “call and col­lect” ser­vices.

It would launch e-com­merce apps and open at least 29 restau­rants in SA and 14 abroad in the year to June 2019.

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