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21 February 2005
Johannesburg – Imperial, Bidvest,
Caxton, SABMiller and Gold Fields emerged in Business Report's
investigation into executive pay as some of the more commendable listed
companies when it comes to executive pay.
SABMiller and Gold Fields can't claim they don't pay their
executives a lot of money, but in their annual reports they are clear
about how they pay them and what the targets are, while shareholders of
Imperial, Bidvest and Caxton will be pleased to find they're getting
some of the the best value for money in terms of chief executives.
The
three chief executives of Imperial, Bidvest and Caxton – Bill Lynch,
Brian Joffe and Terry Moolman respectively – not only get packages that
are at the lower end of the excesses paid in corporate South Africa,
but they have also overseen long-term growth in their companies.
There
have been no dramatic losses, no dramatic rescues, just solid real
long-term performance. But the norm is not long-term sustainable growth.
Another
of the unintended consequences of disclosing directors' remuneration is
the near obsession with short-term earnings performance that has been
created.
It appears shareholders do not want to hear about efforts
that are being made to upgrade the quality of the company's earnings
and enhance its long-term prospects.
Shareholders want to know what is being done today to boost the next set of earnings figures.
They
know that if these figures shoot up, the share price will quickly
follow, and then the shareholders will be better off, for now.
So
when the annual general meeting (AGM) is held and the executive team
has just delivered an impressive earnings figure, shareholders will
have no interest in discussing remuneration.
With the exception of
Nedcor in recent years, and IBM shortly before it was delisted, the
subject of executive remuneration has hardly ever been raised at the
AGM of a South African company.
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