JOHANNESBURG - Impala Platinum (Implats), the world’s second biggest platinum producer, held out an olive branch to shareholders following a revolt over its remuneration policy last week.
Only 56.4percent of shareholders endorsed the remuneration representing 573707675 shares during the company’s annual general meeting (AGM) held on Thursday.
In addition 58.96percent of shareholders voted for the endorsement of the company’s remuneration implementation report representing 573709463 shares.
Implats told shareholders in September that it had initiated a review of its remuneration policy.
It said on Friday that it had received input from some shareholders, and remained committed to an open engagement process with all shareholders, regarding the endorsement of its remuneration policy and its remuneration implementation report respectively. Implats also invited shareholders to submit their concerns to the company’s secretary.
“The company commits to engage dissenting shareholders within seven working days of their submission,” it said. At the previous AGM held in October last year, shareholder support for the group’s remuneration policy was 74percent, down from 94percent in 2015, according to its 2017 annual report.
“The vote is low, and it was expected. In the notice of the AGM we informed shareholders that we are reviewing our remuneration policy,” said Johan Theron, Implats spokesperson on Friday. The remuneration review, was a work in process.
It extended across South African operations and included policy, job grading, benchmarking, guaranteed remuneration, short-term and long-term incentives, according to the annual report. Implats said in the annual report the feedback to its remuneration committee from shareholders comprised concerns primarily related to the long-term incentive plan.
The concerns were about the performance measures and the early vesting of the chief executive’s conditional shares on resigning from the group, said the annual report. Implats former chief executive, Terence Goodlace, decided not to take his earned bonus for 2015 due to the financial constraints facing the industry.
Instead, the amount was converted into Implats shares, vesting over three years, so the amount he gets will depend on the performance of the platinum company’s share price over the period. In addition to the shares Goodlace received for forgoing his bonus, his earned retention payment was also converted into Implats shares and the vesting thereof postponed to be delivered equally over three years.
Goodlace has left the company last December after leading the organisation for four-and-a-half years.
He was replaced by mining veteran Nico Muller, who has headed operations at Royal Bafokeng Platinum before moving to Gold Fields to manage the South Deep operation. Under Muller's watch the company grappled with the low platinum price, increasing fatalities and a five month long wage strike. Goodlace forfeited his bonus and incentives after the five month platinum belt wage strike in 2014.
The strike involving 70000 Association of Mineworkers and Construction members at the three major platinum houses dented Impala profits by 17percent. In South Africa, there is a debate about the gap between the remuneration of directors and mine workers in the mining industry. There is also a strong movement for listed companies to adopt better remuneration reporting and for all organisations to implement fair and responsible remuneration policies.