Peter Moyo digs in over full exit deal with Old Mutual

There could yet be more turbulence ahead for Old Mutual

with suspended CEO Peter Moyo signalling he will not go without a fight, not least about his exit package.

Moyo said he was unhappy with the board’s decision and denied there were governance issues related to his shareholding in another company, NMT Capital, which has previously received financial backing from Old Mutual.

The relationship predates his appointment as CEO.

Moyo, who was paid just over R50m in the 2018 financial year, told Bloomberg on Friday he would demand a "complete" payout deal before even considering accepting an exit offer.

COO Iain Williamson has been appointed as acting CEO.

Old Mutual said on Friday it had decided to "separate" with Moyo because of a material breakdown of trust and confidence. Though the statement said Old Mutual had "separated" with the CEO, audit committee chair Nosipho Molope said Moyo had been suspended and discussions were yet to take place to determine his fate.

The announcement, which baffled investors, sparked a slide in the share price of as much as 6%, the most since its listing on the JSE in June 2018.

It eventually ended 3.2% lower at R21, which almost doubled its decline for 2019 to 6.3%.

Moyo co-founded investment firm NMT Capital, in which Old Mutual Life is an institutional investor.

Old Mutual chair Trevor Manuel, a former finance minister, told shareholders during the company’s annual general meeting (AGM) on Friday that when Moyo returned at Old Mutual in 2017, the company thought the conflict of interest would be manageable as it was covered contractually.

"To the best of our ability we tried to manage it but sometimes these things become unmanageable and I think we’ve reached that point," he said when shareholders wanted to know why it was a problem now when the company was always aware of it.

But Moyo disputed that business relations between Old Mutual and NMT Capital began raising governance concerns.

"I don’t think it was difficult to manage it. I think other people had a different view on how it ought to have been managed. It wasn’t managed any differently to what was set up at the beginning. I don’t think there were any issues on the governance side either, as far as I’m concerned," he told Business Day.

Manuel also emphasised on Friday that Moyo’s suspension was neither a result of poor performance nor financial misconduct on his part. "We must be careful never to create a straw story that he did something wrong. We never said he did something wrong. Doing something wrong and a breakdown in trust are not the same thing."

Manuel said the board believed suspending Moyo would be the right thing to do in the interest of corporate governance, though it was "probably the hardest thing any of us had to do".

Molope said Old Mutual would have further discussions with Moyo during his suspension period and the group

would update shareholders.

According to Old Mutual’s remuneration report for the year ended December 2018, Moyo received total compensation of R50.5m, the biggest contributor being his R15.4m reward from the managed separation incentive plan.

Most watchers were taken aback by Moyo’s suspension. Shareholder activist Theo Botha said the manner in which Moyo’s suspension was handled could cause reputational damage. "There were two SENS announcements issued on the matter on Friday. The share price consequently took a hit.

"Perhaps the board should have been more prudent in terms of communicating with shareholders ahead of what was their first AGM," Botha said.

With Marc Hasenfuss

buthelezil@businesslive.co.za