MTN's former CEO received R68 million in eight months - as shareholders miss out on dividends
- Rob Shuter, who took over the reins as MTN CEO in 2017, left the telecommunications company in September 2020 with a big final payday.
- The former CEO banked R68 million (which included bonuses and share payments), representing an increase of 42% from the year prior.
- One shareholder activist believes that this payout - at a time when MTN decided against a final dividend - may not sit well with shareholders.
- For more articles, go to www.BusinessInsider.co.za.
The former CEO of mobile telecommunications giant MTN was paid R68 million during his last eight months working for the company.
This includes his basic salary, bonuses and R17.8 million in “other benefits”, as revealed by the group’s annual financial results on Wednesday.
Rob Shuter, who became MTN’s CEO in 2017, handed over the reins to chief financial officer, Ralph Mupita, in September 2020. Before bidding the company a final farewell, Shuter was paid a hefty sum, with a R18.2 million basic salary and bonuses totalling R30.1 million.
Adding to the R48.3 million for the eight months worked in 2020, Shuter also received R17.8 million in “other benefits”, which included shares awarded by MTN as part of his remuneration. Including Shuter’s R2 million for "post-employment benefits", the former CEO walked away with R68 million last year.
This figure excludes the pre-tax share gains on equity-settled share-based payments totalling R5.7 million.
Mupita’s basic salary earned in 2020 totalled R12 million with a bonus of R17.7 million. Additional benefits brought the new CEO’s earnings to just over R30 million. Group Chairman, and former deputy finance minister, Mcebisi Jonas, received R5.1 million for his year’s work.
The big paydays for Shuter and others may not sit well with shareholders, who on Wednesday found out that they won't receive any dividend from the company for the past year - despite a 60% increase in headline profit.
“MTN has always been very generous with their remuneration packages to their exco members,” quipped shareholder activist Theo Botha of Proxy View, which advises investors on issues of good corporate governance and transparency.
“Rem [remuneration] policy, chairmen and committee members should be very careful of awarding directors fees outside of the norm, particularly when shareholders haven’t received a dividend.”
MTN said that it is suspending its dividend to focus on further reducing debt. The company's net debt burden was almost at R50 billion at the end of 2020.
MTN's share price fell by 2% following the release of its results, and the no-dividend announcement.
The group, which is active in more than 20 countries and derives a third of its revenue from Nigeria, grew its service revenue by 12% to R170 billion by the end of December 2020. Its number of subscribers increased by 28 million to 280 million across 21 markets.
Additionally, the company added 19 million data users, bringing its total to over 114 million and coinciding with growth of more than 110% in data traffic.
MTN Ghana reported a high growth rate of 16.6%, with Nigeria following closely behind at 14.6%. MTN South Africa’s growth was muted at just 1.6%.
It also has a new strategy, called “Ambition 2025”, which will involve “structurally separating” its infrastructure assets and platforms, such as fintech, to attract third-party capital and partnerships into these businesses, over the medium-term.
(Compiled by Luke Daniel)
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