Standard Bank mum on pay policy
STANDARD Bank this week neatly sidestepped questions by shareholders criticising its opaque remuneration policy, offering to discuss this privately with concerned investors.
At the AGM on Thursday, 16% of shareholders voted against the bank’s remuneration policy, with shareholder activist Theo Botha saying there was no way to determine whether bonuses were fair and reasonable as detailed performance measurements were not made public.
Similar issues were raised at the Barclays Africa (formerly Absa) AGM last month, when 18.4% of shareholders rejected the bank’s remuneration policy.
“A point I’d like to make, and which I also made at the Absa AGM, is that very little information is given in this remuneration report, especially in terms of the short-term bonuses, to enable shareholders to hold directors to account,” said Botha.
Standard Bank’s top four executives — joint CEOs Ben Kruger and Sim Tshabalala, chief financial officer Simon Ridley and investment banking chief Bruce Hemphill — were paid R33.3-million in cash bonuses last year, dwarfing their base salaries of R22.5million. Their total compensation for the year was R104.7-million.
Mehluli Mncube of Eskom’s pension fund asked why the board was seemingly not acting on issues raised by shareholders over the past three years. He also decried the vague policy. “A substantial portion of remuneration comes from short-term incentives. You would therefore expect clearcut links to company performance.”
Shareholders questioned the remuneration of Kruger and Tshabalala, who oversee separate areas of the banking group but received exactly equal cash bonuses of R9.4million each last year.
“Seeing as they are responsible for two different areas, you would expect slightly different bonus levels. Paying them the same bonus shows there is no correlation between the bonus and performance,” said Mncube.
Ted Woods, chairman of the remuneration committee, said they did a “detailed evaluation on pre-agreed spheres of delivery for our CEOs”.
From that evaluation and based on value they delivered to the group, ‘‘we need to make a value judgment of the pay . . . This year it was our choice to equalise the pay to each”.
Woods asked for a meeting with Mncube and his team to discuss their concerns separately.