Praise for a job well done

Generous reward for CEO Richard Brasher hasn’t pleased everyone, but analysts say he deserves it

Pick n Pay CEO Richard Brasher, widely regarded as having saved the retailer from terminal decline, has at last banked the sort of reward that would not have embarrassed former Shoprite hotshot Whitey Basson.

Pick n Pay’s just released annual financial statements reveal that Brasher’s remuneration for 2019 was R32m, almost three times what he was paid the previous year.

It’s a generous payment but nothing that comes near the eyewatering sums picked up by Basson over the years.

The real kicker for Brasher in 2019 was the additional R81m he got from the sale of 2.2-million shares awarded to him in 2012 and 2015.

This is not the first time Brasher, who was appointed to the top job in 2012, has sold shares awarded to him as part of his remuneration package. Nobody, it seems, thinks Brasher wasn’t worth every cent he banked last year.

“Pick n Pay would be in a world of pain right now if it hadn’t been for Brasher,” says Sasfin analyst Alec Abraham.

He reckons conditions on the JSE and in the economy have changed fundamentally in the seven years since the Uk-born Brasher took the helm.

Since Brasher took the job in January 2013, Pick n Pay’s share price has risen 56% to R72.

By contrast, Shoprite’s share price has shed 3.4% to R170 in that time. (Spar’s price rose 63% over that period, however.)

Pick n Pay also performed better than Shoprite over the last year, even though both retailers saw their share price weaken.

“Since Brasher joined, economic conditions have deteriorated significantly and the competitive landscape has intensified,” Abraham says.

“Brasher stabilised the group and made it more competitive. Improved labour productivity, greater levels of centralised distribution and better buying all helped to produce cost savings — which were used to cut the prices of 2,500 grocery lines and gain market share,” he adds.

Evidence of Brasher’s progress was a long time coming. That, and the much tougher investor sentiment, meant share price growth remained sluggish.

In what was seen as a bid to keep Brasher onside at a crucial time in the implementation of his strategic plan, in September 2017 the remuneration committee granted a 12-month extension to the vesting of 1-million share options that had been awarded to Brasher at R42.24 at the time of his appointment. The options were due to expire in November 2017.

The extension was provided on the basis of a rollover of the previous condition that the weighted average share price for the 20 days to November 14 2018 was at least R68.03. That target was missed by a whisper but the extension did not go down well with analysts, even those who backed Basher.

Andrew Bishop of Element Investment Managers attended the 2018 AGM to voice his unhappiness about the change.

This week Bishop tells the FM he continues to believe Brasher has done a good job.

“Previously we were concerned about the remuneration committee