Does the CEO of Pick n Pay know the name of its Boxer division head and does anyone at the retailer have the faintest clue what the lowest-paid cashier earns?
The answers, certainly, were not apparent at last week’s AGM.
When CEO Pieter Boone was asked who was leading the team of one of the company’s most successful divisions and who was in charge of the Pick n Pay garage forecourt stores, he didn’t provide them.
Had he forgotten or does he just speak to a script? Of course, Boone must know the names of the senior staff he deals with frequently.
Perplexingly, Boone gave a lengthy answer full of corporate speak: “They both have dedicated management [teams] in place with the necessary supporting structures around it. They both report to the CEO. When necessary, there is back office support provided. So I would say an efficient structure with short reporting lines, that enables us to have the agility in place when it comes to the acceleration of those two value propositions that we have created over the years.”
With Pick n Pay recording its first-ever loss in the interim period to end-August, executives and non-execs such as chair Gareth Ackerman may have wanted to use the AGM to show participants they are the right, clear thinking, transparent and effective retailers to turn the company around.
Instead they were evasive, seldom answering questions directly or engaging in good faith.
A lot of the questions raised at the AGM are not what shoppers or shareholders are concerned about. Much was asked about climate change, emission targets and executive pay, when most cash-strapped shoppers are just wondering whether Checkers or Pick n Pay is cheaper.
But Pick n Pay executives get asked the same questions every year, meaning they could come prepared and polished if they wanted to.
Every year, shareholder activist Mehluli Ncube, who represents labour unions, asks about Pay n Pay’s high executive pay. Ackerman is an incredibly well-paid chair and given that his family controls the majority of voting rights, there is arguably a conflict of interest when voting on his package.
Not only are answers seldom forthcoming, but Mehluli’s name has been butchered by Ackerman for the past three years. He has been called “Meluli” or what sounds a bit like “Mmluli”.
At least 70% of Pick n Pay customers must be black; most of its staff are black. Thirty years into democracy, it would be respectful to try to learn to say people’s names correctly or apologise when one can’t.
The AGM proceeded to degrade from there.
For the third year running, shareholder activism group Just Share asked for the disclosure of the lowest worker’s salary. This is to calculate the gap between that and the CEO/CFO pay. They say this is an important metric to measure considering SA’s inequality problems.
Twice Pick n Pay execs said they would disclose this when “the time is right”, with remuneration head Audrey Mothupi detailing how complex pay was in lengthy answers.
Pick n Pay execs have two options to answer this question well: they could say it is an unfair comparison because there will inevitably be a huge gap between a CFO and a cashier’s pay and skills. The other is to disclose the figure.
Ackerman does not hold back when criticising the government at every AGM. Perhaps he could use the same direct language to make an argument as to why disclosing the lowest-paid staff member’s salary so as to compare it with the highest is unhelpful.
But instead Pick n Pay insists the information is “complex” and it will release it when “the time is right”. The lack of a timeline for disclosure is, as Just Share’s Ayabulela Quzu told them in the AGM, “kinda frustrating”.
Then an investment analyst asked Boone what mistakes the business had made when implementing their new Ekuseni strategy. This strategy divides Pick n Pay stores into two distinct chains and invests in opening more Boxer and clothing shops.
The question was to test the management team’s ability to reflect on their strategy and learn from the inevitable errors on the way. Boone offered not a single lesson learnt.
“As elaborated in the presentation earlier this morning, Ekuseni is the right strategy for Pick n Pay. It is a multiyear plan. It has to do with the rejuvenation of Pick n Pay whereby we took the brave decision to decouple the brand when it comes to Pick n Pay and Qualisave, with a more customised offering to the different segments of the market ... It’s the right strategy. It’s a multiyear plan. We are on the right track, but it takes a lot of time and effort.”
It was an AGM of corporate gobbledegook, deflection and repetition.
However, with a year until the next meeting, hopefully the smart accountants have sufficient time to work out what their lowest worker earns or someone can explain why they feel it is an unhelpful disclosure.
Boone and Ackerman may even have time to learn some names along the way.
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