Lonmin shareholders unhappy with directors’ remuneration
A total of 73.8 percent of shareholders voted against approving the 2018 directors’ remuneration report at the annual general meeting (AGM) held in London on Monday the company said yesterday.
According to Lonmin’s 2018 annual report, chief executive Ben Magara was paid a total of £1.45million (R27.57m) in 2018, up from £1.10m in 2017.
Magara was the biggest earner at the company, with a hefty package comprising a £475552 salary, £95110 in pension-related benefits, £55155 in taxable benefits and a short-term incentive of £825133. In 2017, his total package was £466933.
The company’s remuneration committee said that in terms of its balanced scorecard compensation bonus plan it had agreed that 65percent of the bonus should continue to be linked to operational objectives, with the balance attributable to specific financial and strategic priorities. There were no long-term incentives in 2018.
Lonmin’s chief financial officer, Berrie van der Merwe, was awarded total remuneration of £737268. The package included a salary of £242510, £31121 in taxable benefits, £44838 in pension-related benefits, and £418799 in short-term benefits.
Lonmin, which is the subject of a takeover by precious metals company Sibanye-Stillwater, delivered a strong operational and financial performance in 2018, closing the year with a $114m (R1.64billion) net cash position, from $103m last year.
It also entered a new $200m metal-purchase facility in October, which helped to improve its liquidity significantly, and made its first payment to an employee profit-sharing scheme.
At the same time, the transaction with Sibanye-Stillwater was unconditionally approved by the UK’s Competition and Markets Authority, and the South African Competition Tribunal cleared the offer subject to certain conditions.
Lonmin chairperson Brian Beamish urged shareholders to back the Sibanye-Stillwater takeover, charging that it was a long-term solution to the company’s sustainability.
Beamish said, despite Lonmin’s milestones in 2018, the group’s liquidity remained insufficient to drive the new projects necessary to avoid shaft closures and job losses. He said Lonmin was a single-asset producer in a single geography and remained exposed to inflationary cost pressures, as well as volatility in platinum group metals pricing and exchange rates.
Lonmin shares closed unchanged on the JSE yesterday at R15.47.