Super Group’s directors scored handsomely from performance bonuses in the financial year to June 30 (excluding share awards), and their combined remuneration increased 52.8% to R31.75 million, the annual report showed yesterday.
Admittedly, the logistics and mobility solutions group operating in sub-Saharan Africa, the UK, Europe and Australasia did perform well in the year to June 30, 2022, and appear to warrant higher performance bonuses.
Headline earnings a share increased 33.4% to 380.7 cents, the dividend was raised 34% to 63 cents - only the second year in 12 the group has paid a dividend - while revenue was 17% higher at R46.24bn. Net asset value increased by 18.7% to R38.40.
The percent growth of these key metrics seems well below the percentage increases in performance bonuses.
Valentine Chitalu, the chair of the board’s remuneration committee and soon-to-be chairperson, said in the report the results also reflected the impact of the LeasePlan acquisition, stronger performances across most divisions and overcoming significant macroeconomic headwinds, ongoing product shortages and supply chain disruptions.
As an example of how the overall remuneration played out among the individual directors, CEO Peter Mountford’s taxable remuneration of R17.96m included a R9.02m performance bonus, a bonus that had increased from R3.68m the year before.
The performance bonuses of the three senior executives increased to R11.65m from R3.31m.
The group faced questions about its remuneration policy recently when, at the last annual meeting in November 2021, the two resolutions relating to remuneration were not passed by the required majority of shareholders holding 75 percent of the shares.
Only shareholders holding 68.97% and 74.21% of the shares voted in favour of the two resolutions.
Chitalu wrote in the remuneration committee report that after engaging with concerned shareholders, the concerns included that while “incentive structures are well aligned with best practice principles”, the committee should reconsider cash generated from operations and apply a higher weighting to the return on net assets (RNOA) element.
There had also been concerns that the CEO and chief financial officer did not hold adequate fully vested shares in the group.
In addition, there were concerns that incentives needed to be stretched beyond current maximums to encourage executives to strive for maximum corporate earnings.
Chitalu wrote in the annual report that among the recommendations that were being implemented to deal with shareholder concerns, “the proposed amendments will include both a HEPS growth criterion and a RNOA element”.
In addition, the cash generated from operations performance indicators would be excluded from the remuneration policy, as the perception was that it did not promote alignment with long-term shareholder interests and executive retention.
The committee had also since increased the Heps maximum target to 15% from 9%. The RNOA bonus entry point would be based on the group’s weighted average cost of capital (WACC) as opposed to a nominal 50% of the target return.
Further details of a 10% discretionary bonus scheme were also released in the latest report.
BUSINESS REPORT