Miningmx reports that according to Sibanye-Stillwater CEO Neal Froneman, growing hostility towards executive pay would drive essential skills into the private sector and even force companies to delist.
“There’s a lot of naïvety about executive pay. People look at it emotionally and not technically,” Froneman has remarked. Sibanye-Stillwater has been criticised by unions for paying Froneman R300m at a time when they are locked in a three month strike with gold mining employees. Said Froneman: “This (controversy over executive remuneration) will drive companies to delist and become private because it’s unfair towards the executive and senior management teams that run these companies. The whole sentiment drives average performance and there are people in companies who are not average, and you will lose them to private industry. I fully acknowledge the issue of inequality and poverty, but you don’t solve this by not rewarding performance. You solve it by creating jobs and economic growth, not by cutting salaries of executives.” The bulk of Froneman’s pay related to share incentive schemes, announced in March just as the strike was kicking off. “It’s not my job to defend my salary; that’s up to the board. But the one thing the executives have asked the board is that a greater proportion of their pay is related to performance,” he said. But according to a rated analyst, whilst executive pay was supported by shareholders, and shares were paid at a cost to them in terms of dilution, Froneman nonetheless lacked diplomacy for speaking out about the matter. The criticism against him has indeed been intense.
- Read the full original of the report in the above regard by David McKay at Miningmx
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