Today's Labour News

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earningsBusinessLive reports that hotel and gaming group Tsogo Sun is set to bail out executives who face losses on the R200m interest-free loan they were granted in 2014 to purchase shares.  

The group has lost about a third of its value in the past two years.  The bail-out proposal is said to be the latest evidence of pressure on executive remuneration caused by sustained weakness in the share market.  It will be implemented if controlling shareholder Hosken Consolidated Investments (HCI), one of the most high-profile union investment companies, gets minority shareholder backing to spin off Tsogo Sun’s properties into the separately listed entity Hospitality Property Fund.  At the time of the loan, which has no fixed repayment date and was designed to align executive interests with those of shareholders, it was slammed by unions as empowerment for just a few people.  In exchange for the loan, the five executives concerned gave up their entitlement to a risk-free annual cash payment awarded in terms of the company’s phantom share scheme, which tracks the value of the shares.  At the weekend, Cosatu spokesperson Matthew Parks said HCI was one of the best-run union investment companies and they had confidence the matter would be managed well.  At the annual general meeting in October, 38% of shareholders voted against Tsogo Sun’s remuneration report.

  • Read in full the original of this report by Ann Crotty at BusinessLive

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