Punch-drunk Absa chiefs to hold AGM postmortem
ABSA, now trading as Barclays Africa, will hold a “postmortem” to review the concerns raised by shareholders at this week’s annual general meeting, which left the banking group with a bloody nose.
Though shareholders approved all the resolutions, it received a surprising wallop on two counts. First, 18.44% of shareholders voted against approving its remuneration policy, and 20% of shareholders also rejected the proposal to re-elect director Peter Matlare, who had skipped a number of board meetings.
Brand Pretorius, chairman of Barclays Africa’s remuneration committee, said that this “postmortem” was necessary to review shareholders’ concerns raised at the meeting.
“We can’t ignore the views of our shareholders, and we won’t. We recognise the sensitivity around the remuneration policy,” said Pretorius.
He said the remuneration policy had evolved over time, and the bank was alert to new developments in the area.
“We are soliciting feedback from shareholders who voted against the policy.”
Absa directors were probably expecting some criticism after the bank paid CEO Maria Ramos R28million last year, although the bank performed worse than all its rivals and shed market share.
Theo Botha, a shareholder activist who advised investors to vote against the remuneration policy and Matlare’s re-election, welcomed Pretorius’s pledge to engage with shareholders.
But he said previous engagements had not helped. Barclays Africa’s 2013 remuneration policy undid the progress made in 2012, said Botha.
The extent of shareholder dissatisfaction becomes clearer when you strip out the votes of Barclays plc, which holds 63% of the local bank.
This shows that minority shareholders were almost evenly split on the remuneration policy, for
We can’t ignore the views of our shareholders. We recognise the sensitivity around the remuneration policy
and against. The owners of 3 million shares did not vote.
While this will serve as a rebuke for the bank, it ultimately has no impact on decisions made by Pretorius’s board. That is because South African regulations lag global best practice, as shareholders have only a “nonbinding advisory vote” on remuneration.
In Australia, for example, if shareholders vote against a remuneration policy for two consecutive years, the entire board is dismissed and has to seek reelection. In the UK, the remuneration vote is binding, and a vote against it requires the policy to be changed.
Pretorius said he was unsure whether plans hatched overseas by Barclays plc to retrench 14 000 bankers by the end of the year would have a knock-on effect on pay levels at the local bank.
The vote against Matlare was significant because this was one of the few times shareholders expressed their dissatisfaction at directors being paid despite playing truant.
Matlare attended only seven of Barclays Africa’s 14 board meetings last year, and only two of the four meetings of the social and ethics committee. He also skipped both of the meetings of the information technology committee.
Barclays Africa chairwoman Wendy Lucas-Bull said at the AGM that Matlare, who is also CEO of Tiger Brands, was a valuable asset to the board because of his knowledge of retail markets and Africa.