Mr Chairman, meet Theo Botha
NEWS that Darryll Castle has withdrawn his name from the list of nominees for a new PPC board has prompted speculation that he may be a compromise candidate for the CEO position.
Castle was appointed a nonexecutive director of PPC early last month shortly after the boardroom battle. That appointment had been endorsed by the activist shareholders Foord and Visio Capital, which later called for a shareholders’ meeting to elect an entirely new board.
Responding to the Sens announcement late on Friday on Castle’s withdrawal, former CEO Ketso Gordhan said he had heard that Castle was one of the names on the shortlist of candidates for the CEO job.
Gordhan indicated he was not party to any discussions between the PPC board and the shareholders, but said he did not see a place for himself at PPC if Castle was appointed CEO.
“I will get on with my life, I will hang on to my shares until I get my money back,” said Gordhan, referring to the R4.7-billion drop in PPC’s market cap.
Earlier in the week, PPC sources said everybody involved knew the current process was not optimal. “There are constant attempts to look for a more satisfactory outcome. It would not be good for the company if the entire board was dismissed overnight,” said one PPC executive, indicating that there had been talks between the PPC board and the shareholders aimed at hammering out a compromise.
Such a compromise could see some existing board members remain with some new nominees. But it leaves the extraordinary shareholders’ meeting planned for December 8 up in the air. A compromise would require a significant change to the meeting’s agenda, which would delay the meeting until January.
While this is likely to please most shareholders, the workers who hold a 6% stake in the company are likely to be unhappy about the potential loss of Gordhan.
Ahead of any compromise arrangement, it appears most PPC employees would vote for the scrapping of the old PPC board.
Workers who were involved in a petition to reinstate Gordhan as CEO, which was signed by more than 1 000 of their colleagues in September, are adamant that there is 80% backing amongst workers for the removal of the old board.
This puts them at odds with institutional shareholders who do not like boardroom dramas and are inclined, whatever the merits, to vote for the incumbent board and penalise whoever they con- sider to be the instigator. In the PPC battle, that is Gordhan.
Like most shareholders to date, PPC employees have not been that involved in exercising their rights such as voting at shareholders’ meetings. But the extraordinary shareholders’ meeting on December 8 appeared set to be entirely different.
I will get on with my life, I will hang on to my shares until I get my money back
Employees report widespread excitement and said voting has already taken place at many PPC plants across the country.
“Most of us have already voted; HR was very helpful,” said Sam*, who works at PPC’s Jupiter plant near Germiston on the East Rand.
“About 80% have voted for the replacement of the board.”
Johan*, who is part of PPC’s Gauteng-based sales force, acknowledged that policies introduced and championed by Gordhan, such as closing the wage gap and providing houses to lowincome earners “will excite some of the workers to support him” but he sees more at stake. “Ketso has visited all of the plants several times, and knows most of the workers. He created a vision, and it’s shared by the workers.”
The workers are worried about weak GDP growth and the pressure on margins from increased local and international competition.
* Staff did not want their full names disclosed Comment on this: write to letters@businesstimes.co.za or SMS us at 33971 SASOL’s new chairman, Mandla Gantsho, had his first tense encounter on Friday with shareholder activist Theo Botha.
But Gantsho, presiding at his inaugural AGM as chairman of the company since Hixonia Nyasulu resigned last year, quickly had enough of Botha’s grilling.
He pleaded with Botha to end his questions to the board.
“I do not want to use my power of being the boss,” Gantsho said, but then did so anyway, cutting Botha off and moving on to other items on the agenda.
Botha and other shareholders said the petrochemical group was not revealing enough information about its R90-billion investment in an ethane cracker and derivatives complex at its site in Lake Charles, Louisiana, in the US.
Botha said the board needed to align the interests of shareholders with those of management by allowing shareholders to vote on the issue.
He fumed that the board should not be allowed to announce the deal without prior consultation, saying: “This is totally unacceptable because if we allow them to continue doing this, how do we hold them to account?”
The board promised to improve on its consultative process with shareholders.
This is not the first time that shareholders have shown dissatisfaction about the Lake Charles deal.
Sasol’s share price fell 0.5% on the day the investment was announced last month.
Shareholders also said that executives’ targets for earning incentives were too low.
The bonus incentives were intact for the period even though the company missed market estimates.
Sasol’s share price rose 2.29% in the year, well below the JSE’s average of 8.5%.
CEO David Constable’s bonus more than doubled, which particularly troubled shareholders.
Constable’s total earnings including short-term bonuses came to more than R30-million — tax free.
Sasol said incentives were based on international standards, which included low taxes for expats. In other words, it had Constable’s tax bill covered.
During the voting on remuneration policy amendments for the next financial year, 11.7% shareholders were opposed and 88.2% in favour.
About 10% of shareholders showed contempt for the request to increase directors’ tenure to more than five years by voting against this motion.