Anglo share price cheers investors, but CEO even more
Boss Mark Cutifani’s remuneration in 2018 more than doubled to £14.2m thanks to company incentive plan
As the Anglo American board prepares for its annual general meeting at the end of April it must look on with envy at the huge support subsidiary Anglo American Platinum (Amplats) has for its remuneration policy.
At last week’s Amplats AGM almost 100% of shareholders voted in support of the group’s remuneration policy. This is pretty much unchanged on the previous year’s support. Of course it helps that 78% of the Amplats’ shares are held by Anglo and probably accounts for the overwhelming majority of shareholders attending the AGM.
The Anglo board will be keen to see if the steady firming of the share price, since it hit a low of R54 in January 2016, will be sufficient to reverse the trend in recent years of shareholders opposing its remuneration policy.
It might not help that one of the consequences of that share price strengthening has been the sharp hike in the value of share options awarded to the executives. Anglo CEO Mark Cutifani’s remuneration in 2018 more than doubled to £14.2m from £6.9m in 2017 thanks to the £11m worth of shares in his long-term incentive plan (LTIP). In 2017 the shares in his plan were worth only £3.2m.
In terms of Anglo’s policy, the value of the shares in the executive plan is set at 300% of the individual’s salary and modified based on the company’s performance over a three-year period. While shareholders must be grateful for the group’s ability to survive the pummeling of the global commodity sector, some may have reservations about backing record levels of pay – given that the company is significantly smaller than it was when Cutifani first joined the executive team.
And, while the share price has held up well, last year’s profit performance was not that impressive.