Johannesburg - The Barclays Africa board fended off a mild onslaught from shareholders on recent performance, executive remuneration and CEO Maria Ramos’s time commitments.
Shareholder activist Theo Botha led the onslaught. It fell to board chairman Wendy Lucas Bull, finance director David Hodnett and Ramos to bat away some tricky questions. Botha questioned the bank’s return on equity, which is currently below its target of 20% to 25%, which was revised downwards after being missed over the past three years.
Hodnett noted that the targets were revised in the wake of turbulent macro-economic conditions as Absa recovered from the recession and was looking to regain or improve market share in a number of segments.
Botha also questioned the acquisition of the Edcon debtor book, which has under-performed. Hodnett admitted that they had not foreseen Edcon hitting the rough patch that has seen it record losses, but action had been taken to reduce the loss ratio on the book.
Botha questioned Absa’s acquisition of Barclays African operations and whether that was on track, pointing out that the returns are still below target. Ramos said the move was the correct one as Africa remained one of the fastest growing regions in the world and the drive for earnings growth was never meant to be a short-term goal.
On executive remuneration, Botha argued that some executives enjoyed constant remuneration even when their divisions saw earnings fall, specifically citing Craig Bond, head of Retail and Business Banking. Lucas Bull noted that remuneration was designed to attract and retain talent, and Bond had guarantees on remuneration when he was lured to the business two years ago.
Shareholder Roy McAlpine questioned the demands placed on CEO Maria Ramos’s time. He pointed out that her Barclays Africa commitments in board and board committee meetings were 28 over the past financial year, all of which she had attended. In addition, Ramos serves on Barclays Plc Executive Committee, which requires extensive preparation and frequent travel to London. McAlpine noted that Ramos also serves on the board of the World Economic Forum and as a non-executive director of luxury goods group Richemont, based in Zurich, Switzerland. He assumed a quarterly attendance and estimated her to have earned R1.7 million in board fees. He argued, as a former executive, that the job of CEO required Ramos “to live and breathe” Barclays Africa.
Lucas Bull confirmed that the board was satisfied that Ramos was adequately focused on her job. She noted that serving on Barclays Plc Exco was essential as this kept her in touch with global operations on matters such as technology and helped with work with multinationals on the continent. Lucas Bull added that serving on such boards as WEF was necessary to keep Ramos in touch with issues outside of her industry.
Ramos said she takes leave for her Richemont duties. She confirmed that she pockets the fees, although alluding to making donations to various personal causes without giving details.
ANA