Johannesburg - Fashion value retailer Mr Price on Tuesday announced performance shares awards for its top bosses that would vest in five years, were subject to growth in headline earnings targets and were part of the group’s strategy.
“The shares awarded have been purchased on behalf of the participants, who receive voting rights and dividends during the vesting period,” the company said.
As part of the “executive forfeitable share plan” Mr Price CEO Stuart Bird was entitled to R4.4 million worth of shares after being granted 31 834 shares valued at the share price on date of offer of R138 a share.
CFO Mark Blair was granted 18 382 shares in the executive forfeitable share plan, which were valued at R2.5 million at the share price on date of offer and could be worth multiples of that value on vesting in five years if the share price recovers.
The executives were also granted shares options at a strike price of R138 and with a combined total value of transaction of more thanR84 million.
The company, which also sells furniture and homeware, said the nature of interest for all the persons concerned was directly beneficial and the grant and acceptances had been authorised by the remuneration and nominations committee and clearance obtained from the chairman.
Peter Takaendesa, a Cape Town-based portfolio manager, at Mergence, said his concern was that Mr Price had not clearly specified the target of headline earnings per share for the executive incentives or how that translated into returns to shareholders.
“I would want to hear them talk about returns to all shareholders targets. It is always good to have fair performance-based incentives for directors and they also need to ensure they are good corporate citizens when pursuing those targets,” he said.
The share awards were in addition to the R15.27 million Bird took home in the year to March. Blair received a total of R9.6 million for that 12-month period.
The company said that the outcome was that the chief executive received a salary increase of 12 percent and the chief financial officer received a 6 percent increase.
The group reported 13.7 percent lower headline earnings a share in the half year to October of 351.2 cents and it cut its interim dividend by 8 percent and reported a 228.2c a share dividend compared with 248c in the same period last year.
The retailer had previously said it expected trading conditions to remain difficult in the second half with no relief in sight for the embattled consumer. Bird said much would depend on the Christmas trading period and when the major sales of summer merchandise in the apparel sector started.
“All our businesses are adapting rapidly to the changed and more difficult trading environment and will be fighting to maintain or increase their market shares in the months ahead,” Bird said previously.
Shares in Mr Price declined by 2.91 percent to close at R150 on the JSE yesterday, while the JSE's general retailers index fell by 2.91 percent.