Tiger Brands’ chairperson maintains huge payouts are necessary to attract and retain top talent.
The R34 million in bonuses paid to Tiger Brands’ new CEO and two top executives were justified, the company’s newly appointed chairperson, Khoso Mokhele, said in an interview this week.
Lawrence MacDougall, who joined Tiger Brands in May last year, was paid a R20 million sign-on bonus. Noel Doyle, now Tiger Brands chief financial officer, was paid a retention bonus of R10 million, while Grattan Kirk, who is the group’s business executive of consumer brands, was paid a retention bonus of R4 million.
“The bonuses were certainly justified ... When you go looking for the kind of person that you need to be CEO of a company like Tiger Brands ... you find them being successful in ... another company,” Mokhele said.
“There are elements of their remuneration and benefits that they forfeit. You will not, in this day and age, pick up a new CEO from outside and not have to compensate [them] for what they forfeit when they leave the company that they have been working for ... Otherwise, how do you attract [someone] to a company like this?” he asked.
Turning to the retention bonuses paid to Doyle and Kirk, Mokhele said that they weren’t “necessarily” in the running for the CEO position, but they were retained because they were “deemed by the board” to be key individuals in keeping the company as “settled as possible” during the transition from one CEO to another.
On a related note, at the recent Tiger Brands annual general meeting (AGM), only 54% of Tiger Brands’ shareholders backed the company’s remuneration policy, down from an 89% backing at the 2016 AGM.
Mokhele agreed that the vote indicated shareholder dissatisfaction.
He said that the Tiger Brands board had not yet met with any shareholders who had voted against the remuneration policy resolution.
“Firstly, you need to identify who those shareholders are, but we are in the process of driving an engagement. We have not yet had sessions with any. It is something that I and the chairperson of the remuneration committee [Santie Botha] have availed ourselves to do.”
At the end of March, Tiger Brands’ board would be holding a strategy session that would include a look at the company’s strategic review.
“The CEO and his team are quite busy preparing material for that session.”
After MacDougall joined Tiger Brands, he started a strategic review and the results of this are set to be released in April or May.
Mokhele said that MacDougall had been briefing the board on a “regular basis” on where the review was leading.
The appointment of MacDougall has been criticised as a sign that transformation was going backwards.
In November last year, Ajay Lalu, BlackLite managing director, said at an event by the Association of Black Securities and Investment Professionals, which is part of the Black Business Council, that: “We are clearly regressing, in particular at top management levels. Recent appointments of CEOs of large listed companies such as MTN, FNB and Tiger Brands are a leading indicator that appropriate succession planning is not important, but satisfying the market is more important.”
Mokhele said that the Tiger Brands board was “unwavering in our commitment to the transformation of our society”.
“Identifying an incredibly capable individual to lead a company cannot and should not be read as indicative of the company’s lack of commitment to transformation.
“He may be white, but I can tell you, his passion and commitment for transformation is unmatched by many.”
On the topic of transformation at Tiger Brands, Mokhele said that he wasn’t happy with the state of transformation at Tiger Brands.
“I’m happy with the commitment to transformation, but it is a journey that we are now on. I’m sure any self-critical entity will believe it can do better than it is doing.”
Turning to the role of chairperson, Mokhele said: “The challenge of being chairperson of Tiger Brands is something you accept soberly. I certainly hope that the faith and trust that was placed in me will prove deserved.
“I’m looking forward to this role as the chairperson of Tiger Brands.”
Turning to his plans as chair, Mokhele said: “This is a well-governed company in many ways ... There is a need to make sure that the board presides over an ethical company that is a good corporate citizen ... In this day and age, post-Enron and after the 2008 financial and economic collapse, boards no longer pay lip service to all these challenges. This is the kind of company I would like Tiger Brands to be.”