Just hours after the announcement that Peter Bruce would be breaking with a very long-held tradition in the media industry and assume the roles of both publisher and editor-in-chief of BDFM, Times Media Group (TMG), which holds 50 percent of BDFM, announced that it was proposing to adopt a management incentive plan.
In a note sent to staff yesterday, Bruce said that the BDFM board had asked him to be the editor-in-chief and publisher of BDFM, which publishes Business Day and Financial Mail and operates Summit TV.
Also yesterday afternoon, TMG issued a Stock Exchange News Service announcement advising shareholders that it proposed to adopt a management incentive plan, the details of which were sent to shareholders yesterday.
The incentive plan will provide for the award of share options to eligible employees. The vesting of such awards will be subject to performance criteria set by the board.
TMG chief executive Andrew Bonamour did not respond to speculation that certain members of management would be retrenched and that an incentive plan was needed to attract new management talent. He did say that the scheme was intended to retain and attract new talent and said some journalists might be included.
“People generating the revenue must be incentivised and aligned with shareholders.”
Bonamour noted that currently there was no incentive scheme in place and that the previous Avusa incentive scheme had only benefited executive directors.
The scheme will need shareholder approval.
Although TMG owns 100 percent of the highly profitable and cash generative Sunday Times, the group has struggled to sustain profit growth. It’s non-media assets, which include Gallo, Nu Metro and Exclusive Books, have underperformed for several years. The group currently has an estimated 300 property leases, which industry sources say are not being managed effectively and are a drain on cash flow.
Last year Bonamour, who is also the chief executive of Blackstar, completed a debt-funded restructuring of the group, which saw Mvelaphanda Group significantly reduce its holding in the former Avusa. Following that restructuring and some recent share purchases, the major TMG shareholders are the Public Investment Corporation with 19.3 percent, UHC with 16 percent, Coronation with 15 percent, Blackstar with 15 percent, Caxton with 10.8 percent and Allan Gray with 5 percent.
The other 50 percent stake in BDFM is owned by UK-based Pearson’s, which owns the Financial Times (FT) but is reported to be a selling that paper. News service Bloomberg has been tipped as one of the parties interested in buying the FT.