The pay of Sibanye-Stillwater’s serial deal-making CEO, Neal Froneman, has dwindled from the R300m he earned in the 2021 financial year to R55m in the year to end-December.
His remuneration echoes the company’s fortunes, which have been hit by a plunge in the basket price of platinum group metals (PGMs) in the period.
The group reported a loss for the year ended December of R37.4bn, from a profit of R19bn in the corresponding period in 2022. Sibanye also impaired R47.5bn across the group. The group was in a net debt position of R11.9bn compared with a net cash position of R5.9bn previously.
These results saw Froneman’s pay slashed from R189m in the 2022 financial year to R55m in the year under review.
Sibanye in 2021 raised eyebrows when it paid Froneman R300m. However, Sibanye that year reported a profit of R33.8bn. The lion’s share of Froneman’s 2021 pay was made up of long-term share incentives that he was awarded in 2018.
The poor performance in 2023 saw its top brass, including Froneman, take a hair cut on pay, with the group’s non-executive directors opting not to get increases to their fees.
The mining house’s stock is down 67% over the past three years, with the group valued at R62bn on the JSE, down from the R115bn a year earlier.
Sibanye in the group’s annual report published on Friday said for the current year, the company’s total shareholder return (TSR) is below the market performance outcomes and “a substantial reduction in variable pay is observed sustaining the strong correlation between shareholder value creation (TSR performance) and the CEO pay outcomes”.
Chair of the remuneration committee Tim Cumming said shareholders had raised several concerns about executive pay. In particular, they had pushed back at “perceived excessive upside” long term incentive (LTI) opportunities for executives.
“The main contributor to this was the practice of using an ‘on-award multiple’ for each executive by which the quantum of the LTI awards was factored up based on the executive’s personal/strategic delivery scorecard result,” Cumming said.
“This was highlighted as an area of concern by some shareholders because it could lead to unreasonably high LTI outcomes at vesting. After a further in-depth review of market practice in this regard, the committee determined that shareholders’ perspectives were fair and so the application of an LTI ‘on-award multiple’ has now been discontinued and will no longer be applicable going forward.”
Another change Sibanye introduced is refining the scorecards used for the evaluation of performance for short-term incentive purposes by introducing a combined operational and personal/strategic delivery scorecard as opposed to previously having them as separate scorecards.
The group said it had made progress in the migration of the number of employees who historically earned below R250,000 a year into the next income band of R250,000-R500,000.
“This is showcased in the reduction of the number of employees earning below R250,000 from 67% in 2019 to 4% in 2023, with a similar increase in the number of employees earning between R250,000 to R500,000 from 20% in 2019 to 77% in 2023,” the group said.
“This illustrates the progress in our commitment to ensure dignified pay for all levels of employment, particularly at union level, and is a manifestation to our purpose to safeguard global sustainability through our metals.”
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