Moneyweb reports that the FirstRand board spent most of its 90-minute annual general meeting (AGM) on Wednesday trying to defend its “Covid-19 instrument”, which was designed to shelter its top executives from the adverse impact of the pandemic on the value of their long-term incentives.
The majority of shareholders were not persuaded, with a hefty 56.68% voting against the remuneration implementation report. But, the group’s remuneration committee chair Louis von Zeuner told shareholders that FirstRand’s remuneration was not out of line with other players in the banking industry. He explained that the earnings knock resulting from Covid-19 and the lockdown meant that many of the long-term incentives awarded in 2017 did not pay out in 2020. Von Zeuner said it was also possible that long-term incentives awarded in 2018 and 2019 would not pay out and that this could result in top executives being lured away from the bank. Activist Tracey Davies of Just Share reacted: “The [Covid-19 instrument] bonuses are not linked to performance, are in addition to management’s already extremely generous remuneration, and dwarf any salary sacrifices made in response to the president’s call.” Asief Mohamed of Aeon Investment Management also queried why management substantially benefited when things went well – “but do not share in the downside pain when profits are under strain”.
- Read the full original of the report in the above regard by Ann Crotty at Moneyweb (https://www.moneyweb.co.za/news/companies-and-deals/focal-point-of-firstrand-agm-remuneration/)
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