Life as the CEO of a publicly listed company must be good, if you look at the salaries commanded by JSE bosses. The average package, according to PwC, is about R25m, and much more for the CEOs of the biggest companies. Old Mutual Chief Executive Peter Moyo, who was fired this week, earned a total of R35.5m in 2018, reports Fin24. But it’s also tough at the top, as Moyo’s axing reminds us. Moyo was sacked after his suspension was instituted by Old Mutual chairman Trevor Manuel, a former finance minister who collects about R7m a year in board fees from Old Mutual. Other South African CEOs who are also struggling to swim away from the sharks circling in the JSE pool are Tongaat Hulett CEO Peter Staude, who has presided over accounting irregularities, and Choppies CEO Ramachandran Ottapathu, also fingered for dodgy accounting. Moyo, Staude and Ottapathu are the stars of the show in the Financial Times Lex column this week. – Jackie Cameron
By Thulasizwe Sithole
South Africa became the first country to protect the Great White shark back in 1991, says the Financial Times Lex columnist.
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“While the number of predators has still diminished offshore, plenty can be found swimming on the Johannesburg Stock Exchange,” the columnist says, tongue in cheek.
“On Tuesday, South African insurer Old Mutual sacked its chief executive, Peter Moyo, suspended since last month. He left following a conflict of interest regarding investments. His departure follows a spate of CEO scandals since early last year.
“In Old Mutual’s case, the insurer knew about Mr Moyo’s situation when it appointed him two years ago. He founded NMT Capital, a private equity group in which an Old Mutual subsidiary took a 20 percent stake in 2004. The two sides had promised to work to unwind this related party issue when Mr Moyo joined. With NMT and Old Mutual still both paying him, a break-up had to come. In the end, Mr Moyo will have to feed in other waters.”
That, notes the columnist, will not help close the yawning gap between Old Mutual’s 9 times forward price-to-earnings ratio and that of rival Sanlam at 16 times.
“Old Mutual is not the only company fishing for a new boss. This month, sugar producer and property owner Tongaat Hulett revealed accounting irregularities over the way it booked revenues on property transactions. CEO Peter Staude took a dive and shares have been suspended pending asset sales to cover losses, worth up to R4.5bn ($313m) according to the company,” notes Lex.
Local retailer Choppies also makes the editorial pages of the pink paper, with Lex pointing out that this year the company suspended its CEO and top shareholder Ramachandran Ottapathu.
“The company has still not issued an annual report for 2018 following accounting irregularities raised by its auditor PwC. All these follow on from gross mismanagement by the erstwhile chief at supermarket chain Steinhoff. Problems in corporate stewardship persist. Better governance of misguided CEOs requires a balancing force, via management delegation, to avoid future scandals,” it adds.
