Sibanye-Stillwater boss Neal Froneman received a total pay package of R189m in the 2022 financial year, down from R300m the year before, the miner’s annual report showed on Monday.
His total pay fell after the world’s largest producer of platinum group metals (PGMs) posted a drop in profit as commodity prices came off the boil. Its profit fell to R19bn from R33.8bn in the year.
Executive pay is monitored closely in S, which is afflicted by poverty and inequality. Activist shareholders have also been criticising companies where there is misalignment between executive remuneration and share prices.
But Froneman delivered enormous value to shareholders since the company was unbundled from Gold Fields in 2013.
“Over the period of 10 years, even as the company stands now after a difficult period, you still almost quadrupled your money. It does not really matter how much a person who is doing the job gets paid,” said Petri Redelinghuys, trader and founder of Herenya Capital Advisors.
“I get the argument that workers might not necessarily be paid enough. But from the investor perspective, if you put a million rand in this business when it listed, you have almost four times as much money 10 years down the line. I don’t think it’s a bad deal.”
Sibanye listed at about R13 a share as a pure SA gold producer before branching into PGMs with the acquisition of Aquarius Platinum and Lonmin assets at the bottom of the commodity cycle, and then diversifying its geographic base by acquiring predominantly palladium assets in the US.
The group’s market capitalisation rose from R10bn in 2013, when it listed, to more than R100bn today. The mining house also returned more than R41bn in additional value to investors in the form of dividends and share buybacks.
More recently, it has been expanding its green metals portfolio in countries including the US and Finland.
The share price was little changed at close of trade on Monday at R40.57, valuing Sibanye at R115.7bn. It peaked at R75 a little more than a year ago.
Sibanye, like many other miners, felt the pinch in 2022 as PGM prices retreated after a surge in 2020 and 2021 as a result of global supply chain disruption.
“Froneman will either succeed or fail based on the fortunes of the PGM prices and the gold price,” said Asief Mohamed, chief investment officer of Aeon Investment Management.
“Of concern is the increasing fatality trend at certain Sibanye-Stillwater mines.”
Four contractor employees died in an accident at its Burnstone project near Balfour in Mpumalanga two weeks ago. The incident happened after the collapse of a newly constructed surface waste rock conveyor.
In 2022, Froneman’s R300m pay package sparked much criticism and brought into sharp focus the pay gap between executives and workers. But the lion’s share of the bonanza at the time was due to long-term share incentives awarded in 2018.
In the latest annual report, Sibanye also announced it was reviewing the board’s composition.
The review will look at diversity policy, tenure policy, the rotation policy and monitoring the independence of nonexecutive directors.
“In the future, the board will be more global, with an increasingly internationalised composition to oversee the geographic diversification of the group. Without increasing the overall size of the board, it will be critical for the board to have an appreciation for the European and North American markets to oversee the establishment of new business activity in those regions,” said Sibanye.
“This will need to include a specific focus on the battery metals and clean energy markets. With innovation adopted as an additional value, the suggested capacity would also likely be well suited to oversight of the group’s innovation strategy.”
The group’s ageing board is chaired by Vincent Maphai, 71. Six of Sibanye board members are 65 or older.
In 2013, the group employed 36,274 people, including contractors, in SA. By 2022 this had risen 133% to 84,481 worldwide. The vast majority continued to be in SA.
“Entry-level salaries at our SA gold operations have increased by over 105% since 2013, significantly ahead of inflation, contributing to a decent living wage and reducing wage disparity,” the group said.
Update: April 24 2023
This article has been updated with new comment and information.
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