Sasol shareholders push back against pay
- Investors holding more than half of Sasol shares have voted against the implementation of the company's pay policy.
- This was despite the company’s pre-emptive move to cut fees paid to its chairman and non-executive directors.
- Sasol shareholders have seen their investments tumble in value due to the company’s woes in the US.
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Sasol shareholders who own more than half of the company have voted against the proposed implementation of its remuneration policy.
This is despite the company’s pre-emptive strike earlier this week to slash fees for the chairman and non-executive directors by 20%.
Still, at Friday’s annual general meeting, investors who hold 28% of its shares voted against the company’s remuneration policy. And even more shareholders (56%) voted against the implementation report of the company’s remuneration policy. (The implementation report contains the actual amounts that will be paid.)
Sasol can go ahead with paying executives and directors what it proposed, as according to corporate governance King IV recommendations, a majority of at least 75% is needed to veto proposals. Still, because more than 25% of the votes were against the reports, the company has to engage with shareholders to address their concerns.
Chairman Sipho Nkosi said in response to the vote: “We take the message you’ve conveyed to us by how you have voted on the implementation report on the remuneration policy and some of our other resolutions, so we get the message.”
“We will make plans to consult with our shareholders, As earlier indicated this is a moment of great regret and we will invest a lot of focus to restoring your confidence in us and in the company,” Nkosi said.
Mpho Nkeli, chairman of the remuneration committee said of the directors' packages: “…the executives actually took a pay cut, not only executives, but over 6,000 employees globally to take into account the challenging business conditions. And over and above that, the executives have not had a bonus over the past two years which has dramatically impacted on their overall remuneration.”
She added the company’s non-executive directors’ fees were in line with market peers.
According to a report by Active Shareholders, a non-profit adviser of shareholders, the chairman’s fees in the last decade have been hiked by 106% while SA directors’ saw an increase of 680%.
Last year, the Sasol chairman earned $445,000 (R6.9 million, at current exchange rates), while non-executive directors received $150,000 (R2.3 million). They would also get between $11,000 and $20,000 for serving on different committees.
READ | Amid Sasol’s woes, its directors coined it – earning in dollars, with ‘outrageous’ travel fees
Shareholders grilled Sasol’s executives during Friday’s marathon annual meeting over its remuneration.
Investors have seen the company’s share price lose as much as 74% of its value over the past two years while it piled up debt and faced challenges due to its Lake Charles project in the US. This year alone, Sasol’s share price has fallen 63%.
Earlier this week, Sasol acknowledged that it cuts its director fees in “acknowledgement of the erosion of shareholder value over the past two years".
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