FILE PHOTO: An Old Mutual sign at the financial services company's Cape Town headquarters.
FILE PHOTO: An Old Mutual sign at the financial services company's Cape Town headquarters.

Old Mutual reaches out to its dissenting shareholders over remunerations

By Dineo Faku Time of article published Jun 17, 2020

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JOHANNESBURG - The Old Mutual board has reached out to dissenting shareholders after they rejected the company's remuneration implementation report during the annual general meeting held earlier this month.

Only 73.77 percent of shareholders approved the non-binding resolution on the endorsement of the remuneration implementation report, the company said, adding that the non-binding resolution did not achieve the requisite 75 percent majority votes.

However, the non-binding advisory resolution on the endorsement of the remuneration policy report did achieve more than 92 percent shareholder support, exceeding the requisite 75 percent majority of votes.

Old Mutual, the 175-year-old insurance giant with operations in 14 countries, invited dissenting shareholders to raise concerns or recommendations directly with Itumeleng Kgaboesele, the chairperson of the remuneration committee, in writing by the end of the month. “Old Mutual expects that its remuneration policies and practices will mature and improve through an iterative process that will be facilitated through continuous open and transparent engagement with stakeholders,” said the company.

Last May, during Old Mutual’s first annual general meeting as a South African-listed company, the remuneration report received a thumbs down from shareholders.

The resolution on the remuneration implementation report was rejected by 69.13percent of shareholders, and 54 percent voted in favour of the policy - much lower than the 75 percent required for the resolutions to pass during the AGM last year.

Had the shareholders approved the remuneration report, Old Mutual’s directors would have scored handsomely from the group's return to South Africa from the UK, including axed chief executive Peter Moyo, whose total remuneration for 2018 would have increased more than 48percent to R50.57million over the R34.08m he received in 2017.

Old Mutual said in its 2019 annual report that it had engaged with shareholders during its governance road shows in October and November of 2019 to obtain feedback and incorporated this into remuneration policies as appropriate. It also said that it reviewed the remuneration for the executive committee, executive management and heads of control functions, ensuring they were fairly rewarded. “This included benchmarking remuneration levels against industry peers and organisations of similar complexity,” said the group.

According to the annual report, interim chief executive, Iain Williamson’s single figure remuneration was R13.3m in 2019, down 51percent from R27.4m in 2018 as long-term incentive awards took a knock due to the challenging macroeconomic environment. Casper Troskie, the group chief financial officer, received R9.8m in 2019 from R20.65m a year earlier.

Old Mutual suspended Moyo, as its chief executive, less than 24 hours before last year’s AGM after a breakdown in the relationship of trust and a lack of confidence with the board. It appointed Williamson as interim chief executive in May and terminated Moyo’s contract of employment a month later.

In March, the high court dismissed Moyo’s application to prevent the company from hiring his replacement, paving the way for the company to continue its recruitment process to find a new chief executive.

BUSINESS REPORT 

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