Brasher is set to be in the pound seats

Pick n Pay CEO Richard Brasher is on course to make a hefty profit when he cashes in his one million share options in November 2018.

The five-year term of the options, which were granted to Brasher when he was appointed CEO in 2015, were extended for 12 months when they failed to meet the vesting criteria in November 2017.

Brasher’s options were due to vest in November 2017 on condition the weighted average share price for the 20 days to November 14 2017 was at least R68.03. During that period, the share traded at R57.82R60 and Brasher’s options would have lapsed had he not been granted a 12-month extension. The share closed at R74.72 on Monday.

Director Hugh Herman assured shareholders at the annual general meeting on Monday they would not adjust the terms of share incentive schemes to secure benefits for executives again for as long as he remained chairman of the remuneration committee.

Herman, who has been on the board for 42 years, was responding to concerns raised at the meeting by Andrew Bishop, a portfolio manager with Element Investment Managers.

“We think we have achieved a very good balance between the interests of the executives and the shareholders.”

Herman said the share price performance was negatively affected by the political and economic climate, as well as the R200-million once-off costs relating to voluntary severance packages (VSPs).

The VSPs, which were accepted by about 3,500 employees, and the establishment of a lower entry-level wage will bring Pick n Pay’s staff costs in line with the industry leader, Shoprite.

This helps explain why despite the continued tough trading conditions, the share price is comfortably above the R68 target, although down from its 12-month high of R80.

Pick n Pay has passed on much of the savings to customers in the form of lower prices.