THE BOTTOM LINE
PIC gets heavy with Truworths over transformation agenda
The retailer’s single largest shareholder voted against the group’s remuneration policy at Wednesday’s AGM
The Public Investment Corporation (PIC) wants clothing retailer Truworths to include transformation as a non-financial indicator in its remuneration policy.
The PIC, Africa’s largest fund manager with R2 trillion under management, recently increased its holding in Truworths to 16.32%. This makes it the retailer’s single-largest shareholder and puts it at the top of a list dominated by leading international fund managers such as Standard Life Aberdeen, BlackRock and The Vanguard Group.
The PIC voted against the group’s remuneration policy at Wednesday’s annual general meeting, pushing the dissenting vote to 24.996%. This is just a few thousand shares short of the 25% that triggers an obligation for the board to engage with the dissenting shareholders.
Despite escaping the 25% obligation, the board has engaged with the PIC on the matter, appealing to the PIC to reconsider its vote.
But the PIC, which describes itself as a “champion of transformation”, first wants to see the inclusion of transformation targets in the remuneration policy.
Meanwhile, the trading update released during the AGM provides yet more evidence of the challenging conditions facing the retail sector. Sales for the first 16 weeks of the financial year rose 4.5% to R5.3bn, helped by the rand contribution from the UK-based Office chain of shoe stores. Shareholders have been warned that trading conditions are expected to remain challenging.
But while the share price, currently R80.19, is unlikely to get back to its 12-month high of R114, investors can take comfort from the generous dividend yield.