All about the dodgy Steinhoff deal to reward directors
And market gets the blahs with Naspers and Tencent
Irony abounds in payout to Steinhoff board members
The irony about the proposed controversial payments to the three members of the Steinhoff supervisory board – nonexecutive directors in South African parlance – is that they are probably the only fees they actually will have earned during their time at the group. For each of the three directors involved these will be the hardest earned fees of their nonexecutive director careers. That of course doesn’t make them any the more acceptable. Another irony is that the work they’re doing is likely to be aimed at rescuing their reputations as much as Steinhoff’s value. Neither is served by resolution six.
Everything about the resolution being put to shareholders at next month’s annual general meeting should cause concern. Not least of which is that it does in fact comprise a number of proposals each of which should have its own resolution.As it stands the resolution represents a contravention of the Companies Act, which states that director remuneration can only be paid if it’s in accordance with a resolution approved within the previous two years. The act does not allow shareholders to approve payment for work already done. Perhaps Dutch law is not as vigorous on this matter.
In addition to getting shareholder approval for nonexecutive directors’ fees for financial 2018, Steinhoff has tagged on three payment proposals to resolution six. The main proposal relates to payment for work already done by the three supervisory board members Heather Sonn, Johan van Zyl and Steve Booysen. There’s also a proposal relating to fees for attending meetings over and above those scheduled during financial 2018. Finally, there’s the proposal to pay Theunie Lategan and Len Konar for work they did after the December announcement.
Lumping all of these into one resolution makes it extremely difficult for shareholders to reject the parts they find unacceptable. A vote against the remuneration for members of the supervisory board might just add more uncertainty to a very uncertain situation.Market gets the blahs with Naspers and Tencent
Naspers’s unexpected decision last week to sell a portion of its Tencent holding has so far failed to inspire the market.
The discount between Naspers’s share price, measured against its 31.2%-stake in the Chinese internet company, remains as wide as ever. It has in fact increased since the announcement, despite Naspers indicating it sold $9.8-billion of Tencent shares specifically to reduce the discount over time.
This would be done by buying up minorities in some of its other divisions, while at the same time investing more in classifieds and the online food delivery business.Naspers is down 3.5% so far this month, receiving a lukewarm response from investors. Some have been clamouring for the group to buy back some of its own shares, as well as change its convoluted holding structure, while others have even suggested listing Tencent separately to unlock value.
Investors now have to decide either to trust management to spend the money wisely or vote with their feet and sell.
It seems more likely the status quo will remain with Tencent continuing to be the main driver for Naspers.
Management has also indicated that the company will not be involved in any major corporate actions soon. It would seem Naspers will be sticking with its e-commerce interests to reduce the discount over time, India and Flipkart being the main focus.