Ann Crotty
According to Woolworths chief executive Ian Moir, the company always listens to what its shareholders say about executive remuneration, “especially those who have issues” with the subject.
Moir was speaking to Business Report after the company’s annual general meeting (AGM) at which shareholders with 25.8 percent of the shares voted against the company’s remuneration policy.
Moir received a remuneration package worth R27.1 million for this financial year.
All of the other resolutions voted on at the AGM received support of least 90 percent from shareholders, with the adoption of the annual financial statements receiving a remarkable 100 percent support and many of the other resolutions receiving 99 percent.
The vote on the remuneration policy is a non-binding advisory resolution, which means that the company can ignore it with impunity. The non-binding nature of the vote highlights the fact that when it comes to executive pay, South African executives benefit from one of the most lax regulatory environments in the world.
Business Report was not able to establish which shareholders voted against the remuneration policy. The Government Employees Pension Fund, which holds 16 percent and has an engaged approach to remuneration, is the largest single shareholder in the company.
In regard to shareholder profile, Woolworths has caught up with its local peers in terms of international shareholders, who now account for about 42 percent of the shareholder base. This is up from around 18 percent four years ago.
Moir said Woolworths was “underplayed in that market and we were underrated relative to our peers as a result of that”.
After the AGM, at which no shareholder raised any questions about the group’s difficulties in Nigeria, Moir told Business Report that management would disclose the costs involved in the failed Nigerian project, with the release of the interim results next year.
He said the decision was taken to pull out of Nigeria after operating in the country for just over a year. “We felt the stores were not working and we couldn’t see us getting into a profitable position within the next four to five years.”
Moir said Woolworths’s other African operations were all profitable and growing, while “Namibia is amazingly successful.”
In response to queries during the AGM about the group’s online strategy, chairman Simon Susman said online sales in Australia were doing well and accounted for 10 percent of sales, equivalent to A$100 million (R922m). “In South Africa online sales have not taken off, but we are still the largest online retailer in the country.”
Earlier this month, the board issued a trading update that revealed clothing sales were up 11 percent and food sales up 16.7 percent in the first 20 weeks of financial 2014.