Tuesday, 11 October 2016 23:42

CEO's pay tops R14m as profit falls - again

Written by
Rate this item
(0 votes)

Murray & Roberts pays CEO Henry Laas R14.7m in the financial year to June, including R6.4m in bonuses.

 Henry_Laas_Murray

Murray & Roberts paid CEO Henry Laas R14.7m in the financial year to June, including R6.4m in bonuses, even as the construction group’s net profit declined for the third year in a row, and executives failed fully to meet a number of targets to unlock short-term bonuses.

The group’s annual report, released on Thursday, shows Laas received R5.9m in guaranteed pay, R6.4m in short-term incentives and R24m in longterm incentives.

His pay was exceeded only by that of Peter Bennett, the group’s head of oil and gas who joined in February 2016.

Bennett was paid R17.6m, of which the largest chunk – R7.3m – comprised compensation for incentives he gave up at his previous employer. He received a short-term bonus of R6.3m.

Nine current and former executives were paid a cumulative R14.3m in bonuses.

The report showed the remuneration committee took five financial performance criteria – comprising 70% of the overall score — into consideration when weighing up whether to award short-term bonuses, and only two of those were exceeded. The rest were met only in part.

“Annual short-term incentives of 52.92% of the possible maximum have been awarded in respect of performance in 2016,” Royden Vice, chairman of the group’s remuneration committee, said in the annual report.

“This recognises the group’s financial performance in the current market and the good performance against individual nonfinancial objectives that were set at the start of the year.”

Shareholder activist Theo Botha said the targets appeared low and were easily achievable.

“In my opinion, the bonuses are excessive in the light of the poor share price performance,” he told Business Day. “Operating profits have decreased every year for the last three years. Net profit attributable to shareholders has decreased for the last three years.”

Botha said the share price had plunged 60% during this period. On Monday, it was trading at about R10.94.

Of the group’s three major divisions, only two managed to increase profit during the year to 2016. Botha said the net effect was that operating profit for the year was down by R93m.

“Despite this [the executive committee has] been awarding short-term incentives for the last three years.”

The order book shrank 12.8% to R33.4bn in the year to June, and only R10.6bn of this amount is near financial close.

But the remuneration committee said in its report that financial measures such as earnings before interest and tax, and the group’s actual profit, were used to calculate bonuses.

Laas, group financial director Cobus Bester and the CEOs of each of its business units have a 70% weighting in favour of financial targets.

“Individual performance is also assessed against suitable objectives related to leadership, relationship, operational and risk [including safety] targets,” the committee said.

source: Business Day

Last modified on Tuesday, 11 October 2016 23:54

Most Popular

Building wealth through multiple properties

Aug 01, 2017
Praven Subbramoney
Many individuals who already own more than one property mistakenly overlook key…

Investec Property unearths Komatsu’s next phase of its campus development

Jul 25, 2017
Komatsu 11
Earth-moving equipment giant, Komatsu, has partnered with Investec Property to…

Sun International unveils new Sun Meropa Hotel

Aug 02, 2017
Sun Meropa Hotel
Saturday, 29 July 2017 marked the start of an exciting new era for Sun Meropa with the…

Signatura launches R700million The Onyx on Cape Foreshore

Jul 25, 2017
ONYX Hero High Res Update
Modernist design landmark evolves into iconic residential-hotel development.

The vital link between property finance and effective healthcare in SA Nedbank Property Finance

Jul 28, 2017
DAnvo Jones
The 2016 World Alzheimer Report, released by Alzheimer Disease International highlighted…