Soft landing for hard-currency bosses
EXECUTIVE directors of duallisted companies have topped the 2015 directors’ remuneration rankings, thanks partly to a persistently weaker rand.
Dual-listed companies are listed on the JSE but have a wider global reach in terms of their operations.
Luxury goods maker Richemont is one such company that derives the bulk of its income in foreign currency and its two joint chief executives feature prominently.
Bernard Fornas and Richard Lepeu each pocketed just over R85-million in total salary packages in 2014.
These incorporated benefits and performance bonuses.
Investec executive director Hendrik du Toit walked away with R86-million in total salary, which was an increase of 113.93% from his R40.2-million in 2013.
Richemont reports in euros and Investec in pounds.
The rand, which hovers near record lows to the dollar, has shed more than half its value against the greenback in the past five years.
It has also significantly weakened against the euro and sterling.
Alan Clark, CEO of global brewing conglomerate SABMiller, also stood out as he collected R49.7-million in 2014, which was up 135% from a year earlier.
Pay packages for some chief executives from largely domestically oriented companies, such as Bidvest and Shoprite, were little changed last year from 2013.
Shoprite’s Whitey Basson received R49.9-million and Bidvest’s Brian Joffe made R29.1-million.
Martin Hopkins, PwC partner in reward tax, said companies had generally exercised restraint with respect to increases in executives’ base salaries.
“Executives have a much higher portion of their total packages exposed to company performance conditions, and most industries have experienced tougher trading conditions over the past few years,” Hopkins said.
Shoprite recorded single-digit growth in headline earnings per share in the 2014 financial year, reflecting challenging operating conditions in its home market.
The performance was also affected by the weaker currencies in Nigeria and Angola, where it has operations.
Diversified industrial group Bidvest reported 11% growth in its headline profit in the same period.
Anglo American CEO Mark Cutifani took a 37% cut in his total salary package, from R106.8-million to R66.9-million.
Some companies punched above their weight — Discovery Holdings is one example.
The financial services group lifted headline earnings 45% in the review period. CEO Adrian Gore took home R8.1-million in total salary, which was 16% lower than the year before.
Hopkins said CEOs of UK companies “are paid more than three times the South African level, and their US counterparts are paid more than four times”.
But in comparison to Brazil, Russia, India and China, South African CEOs were paid more, he said.