C-suite soapies

Boardrooms are in turmoil and the public has front-row seats

It is becoming a little difficult to keep up. For a financial journalist it’s like being a kid in a sweet shop. After a while you long for a diet of carrots and apples. You think fondly of the good old days of no-disclosure, when you weren’t even told the full results of an AGM, just that every resolution was passed.

This was a time when Anglo American, Sanlam, Old Mutual and Liberty essentially carved up the economy as they saw fit and stockbrokers could be on both sides of a deal. When traders in some of the big institutions were encouraged to maintain their own personal accounts so they could perfect their trading skills.

Would Tongaat Hulett shareholders be better off if the group had remained part of the lumbering old Anglo empire? Whatever the answer, and it could be “yes”, it’s likely shareholders wouldn’t even have been aware of the meltdown, let alone had front-row seats to watch it.

But Tongaat is only one of the dramas that have recently been playing out on the SA corporate stage. Former Genesis Capital CEO Martin Levick, along with Markus Jooste, has helped to ensure that “charismatic” will never again be a preferred attribute of the corporate leader.

The high-profile spat — why did they wait until everyone was watching? — at Old Mutual has raised the hitherto unimagined possibility that a board would push back against its CEO. How did that happen? Is its chair, Trevor Manuel, taking a principled stand? Or did boardroom egos get out of control? Well, at least Old Mutual policyholders had something to distract them from their dismal returns.

And what about those votes on the remuneration policy and the remuneration implementation report? Forty-six percent of shareholders voted against the former and 69% against the latter. Ah, but

the guys at Old Mutual needn’t worry, they’re “nonbinding advisory” votes, so apart from some temporary embarrassment nothing much hangs on them.

Thousands of kilometres away in Perth, things were looking decidedly different for the directors of mining company MRC, well known in SA for having laid siege to a beautiful stretch of the Eastern Cape coast and for intimidating anyone who dares to complain with lawsuits against public participation.

At MRC’S AGM, held just a week after Old Mutual’s, shareholders also expressed annoyance at executive pay. Three of the five resolutions put to the meeting were not passed. The two that were passed were even more problematic for the board. The remuneration report was passed with 62% and the related “spill” resolution was passed with 59% of the votes.

The passing of the spill resolution means all the directors, except MD Mark Caruso, have to resign. A shareholder meeting has to be held within 90 days to elect another board.

But here’s the thing — the spill resolution was a consequence of Australia’s two-strike rule on executive remuneration. It is triggered when more than 25% of shareholders vote against the executive pay proposal at two consecutive AGMS. As could be expected, the Australian director class complains the rule has been abused by parties wanting to take over a company, but commentators say it has led to a more considered approach to the issue of executive pay.

At this stage it’s unclear whether MRC shareholders have had enough of Caruso’s dogged determination to wreak environmental havoc and destroy the lives of thousands of people in the process, or think he should stop pussy-footing and launch an invasion.

Corporate turmoil is everywhere, it seems.

Would Tongaat Hulett shareholders be better off if the group had remained part of the old Anglo empire?