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Johannesburg - Brand Pretorius, who heads Bidvest automotive division Bid Auto, will take home R800 000 more in salary this year even though Bid Auto shed millions of rands in profit.
The one-third increase in Pretorius' salary was a contentious talking point in Bidvest's annual general meeting (AGM) on Tuesday. Bidvest could not be reached for comment at the time of publication.
Pretorius' salary jumped to R3.37m from R2.5m at end-June 2008. His cash bonus, however, fell to R1.8m from R2.8m in 2008.
"Remuneration is important to retain directors' skills," said shareholder activist Theo Botha, who raised the issue at the Bidvest AGM. "However, it's wrong to give such a high increase to a division head that didn't perform so well."
Bid Auto, which owns the McCarthy dealership brand, reported a 32.3% decline in full year to end-June 2009 in trading profit to R502.9m. This compares to a 3.7% drop in trading profit to R5.1bn for the entire group over the period.
The division's revenue fell 10.8% to R16.5bn, versus a 1.8% increase to R112.4bn for Bidvest over the full year under review.
Bid Auto is operating in an extremely difficult environment, with new vehicle sales in the country grinding to a virtual halt as a result of minimal consumer demand.
Botha said the question mark hanging over Pretorius' generous remuneration relates to bad disclosure on the part of Bidvest.
"It doesn't explain how they award incentives," he said. "It should specify whether these are long term and how they are calculated."
Bidvest also issued a voluntary trading update for the September quarter following the AGM. The group said conditions were still tough but expected an improvement as South Africa gears up to host the Fifa 2010 World Cup.
However, the good news for shareholders is that most of the divisions achieved better profits in the quarter, compared to the same quarter last year.
"The quality of earnings should improve towards the end of the current financial year and performance is anticipated to be in line with expectations," said Bidvest.
- Fin24.com