COINING IT
Gold industry CEOs make a mint as companies hit rock bottom
NICK Holland, CEO of Gold Fields, has offered to waive his bonus this year following presentations to the board by lawyers investigating its controversial South Deep empowerment deal.
The company revealed in March that it appointed international law firm Paul, Weiss, Rifkind, Wharton & Garrison in December to investigate the BEE deal.
The inquiry was expected to be finalised before the annual meeting in May. It is understood that no report was compiled following legal advice.
Gold Fields chairwoman Cheryl Carolus told Business Times that Holland had offered to forego his bonus, “which to us was a very decent thing to do, and we accepted that”.
“It’s not about punishment; it’s really about as captain of the ship you take ownership for the team. If any further action was required, we would have taken it,” she said.
Holland earned a bonus of R8.46-million out of a total package of R45-million last year.
One of the board’s concerns was the decision by Holland’s management team not to disclose the full list of 73 beneficiaries of the deal after requests by the media. This was despite the fact that the list had been made public for two weeks when the deal was announced. Once the full list was released it emerged that beneficiaries included Jacob Zuma Foundation head Dudu Myeni, Cyril Ramaphosa’s business partner James Motlatsi and Nelson Mandela’s daughter Zindzi.
“We were quite concerned there have been procedures which may not have been violations by themselves of anything; we think it was just poor judgment on the part of management, and they should have foreseen that poor judgment would have quite a serious reputational impact for the company,” said Carolus.
The controversial empowerment deal saw politically connected Invictus Gold take 9% of South Deep mine at a cost of R1.1-billion to existing shareholders. Besides the lack of transparency over the beneficiaries, there were also concerns over the role of Gayton McKenzie, a bank robber-turned-businessman, in facilitating the South Deep mining right application.
The Gold Fields board was not satisfied only with complying with legislation or technically following procedures, Carolus said. “We want to be best practice, not just compliant. For us, it has to go way beyond the letter of the law.
“We don’t want management to just tick boxes.”
This week, Gold Fields posted a net loss of $129-million (R1.3-billion) for the June quarter with production dropping 5% from the previous quarter to 451 000 ounces.
The group said South Deep, its only remaining mine in South Africa after the spin-off earlier this year to create Sibanye Gold, was unprofitable and unlikely to meet its target of 700 000 ounces by 2016.