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MultiChoice rings changes after investor concerns about executive pay

People walk across a pedestrian bridge linking two DStv MultiChoice buildings in Randburg. Picture: Karen Sandison (ANA)

People walk across a pedestrian bridge linking two DStv MultiChoice buildings in Randburg. Picture: Karen Sandison (ANA)

Published Jul 29, 2022


MultiChoice, which failed to get enough votes to pass its executive remuneration proposals at its last two annual general meetings, said yesterday it had done a full review of pay policies, had held numerous meetings with investors and had sought the advice of its advisers.

At its AGM in August, and at the 2020 meeting, only 65.9 percent and 67.6 percent of the votes approved the remuneration implementation report proposal respectively, well short of the 75 percent approval threshold.

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Remuneration committee chairman Jim Volkwyn said in the integrated report released yesterday that their feedback from investors included that there had been no retrospective disclosure on STI (short-term incentive) and LTI (long-term incentive) targets.

To resolve this, the group this year included retrospective disclosure on performance relative to STI and LTI targets in the integrated report.

Another concern was LTI targets were not linked to external metrics, and this was remedied by replacing targets based on internal budgets, with targets linked to more objective external performance metrics.

Investors also said there had been no disclosure of forward-looking performance targets. LTI metrics linked to external benchmarks would allow shareholders to determine forward-looking targets.

However, disclosures of forward-looking performance targets for short-term incentives would not be disclosed, “due to the highly competitive nature of these targets for key executives”, Volkwyn said.

Investors were also concerned about the lack of environmental, social, and governance (ESG) targets. To resolve this, ESG performance hurdles were introduced based on a blend of external agency ratings and company specific measures, as part of the LTI metrics.

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Shareholders were also concerned about the lack of disclosure surrounding the Phantom Performance Share (PPS) scheme, and additional disclosure was included in the report.

The satellite broadcaster has some 9 million subscribers in South Africa from which it generates 65 percent of its income, while it has 12.8 million subscribers from its rest of Africa business from which it generates 32 percent of income.

The group thus generates a lot more income from a lot less subscribers in South Africa, than it does from other African countries. The group faces increasing competition in its markets by streamed services, this after enjoying a monopoly on the pay-TV subscriber market in South Africa in its earlier years.

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“We are also aware that streaming technology alone does not automatically solve all the operational and business challenges of a pay-video content enterprise. As stock market valuations correct, interest rates on debt rise and macro-economic issues shift dramatically. Global streamers are coming to the same realisation,” the group said.

“According to the report, the rest of Africa operations are “on the cusp of reaching breakeven”.

“Our rest of Africa business is working towards the launch of DStv as a standalone streaming service across our African markets, starting with Kenya. Customers will be able to subscribe to and watch all channels via the DStv app, without a decoder or satellite connection.”

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Digital adoption was being grown across the group’s sub-Saharan Africa footprint, with its revamped websites spanning 50 markets, the apps are available in 48 markets, while the WhatsApp self-service has been launched in 13 markets.

The group said it was “at the stage of our journey where we are able to look beyond paid video entertainment services”.

“As electrification, connectivity and digital banking increase, and a growing, urbanising middle-class enjoys rising discretionary spend, the continent represents a compelling addressable market.

“In video entertainment alone, we estimate the opportunity at 58 million households by 2027, and we believe there are several other verticals that could represent equivalent or even larger addressable markets for us,” the group said.

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