Naspers CEO Bob van Dijk and CFO Basil Sgourdos are in line for a one-off cash incentive after rolling out an unprecedented multibillion-rand share buyback programme, which the group says has created $25bn in shareholder value.
In its annual reported released on Tuesday, the group said Van Dijk will be paid €3.4m and Sgourdos €1.8m in the form of a special discount-related short-term incentive (STI).
Naspers said the cash incentive is linked to reducing the discount to net asset value (NAV), the group’s perennial problem.
The company has historically traded at a discount of 35%-40% to its NAV per share, a situation where assets held within Naspers are worth more summed individually than what the market values Naspers at.
To deal with this challenge, a year ago the group embarked on an aggressive share buyback, buying back billions of rand worth of its stock.
This is after the company’s board approved an open-ended repurchase programme of Prosus and Naspers shares, designed to unlock immediate value for shareholders and increase NAV per share over time.
Naspers said Van Dijk and Sgourdos’ STI will only be paid on successful discount reduction.
“During financial year 2023, the discount, measured over the period of the programme through to the end of the fiscal year, saw a reduction in the discount from 58% to 42%, the discount reduction representing value creation of approximately $25bn, which represents a material improvement in the discount,” the group said.
“The reduction of the discount and value created during the period represents a material improvement in the discount and the committee has deemed that the incentive should be paid, subject to the one-year holding period which was communicated at the outset.
“The incentive will only vest, if at March 31 2024 the discount improvement is sustained or improved. To be clear, so long as the discount at March 31 2024 remains no greater than the 42% level indicated at March 31 2023, the discount-linked incentive will be deemed vested and then paid.”
Outside the discount-linked cash incentive, Van Dijk was paid total remuneration of €16.2m in the year ended March and Sgourdos €9.8m.
Craig Enenstein, chairperson of the human resources and remuneration committee, said there is ongoing monitoring of market developments to ensure the company’s remuneration structure allows it to compete globally for talent.
“We are a global rather than an SA company, operating in a highly competitive international environment. Most of our competitors are not listed in Johannesburg. Our remuneration practices are aligned within a global technology landscape and may differ from what is customary in the SA context,” he wrote in the annual report.
“Executive talent comes from other international, often leading US-listed companies in the consumer internet sector, which forms the basis of our executive remuneration benchmarking.
“To reflect the balance of the underlying value of economic interests between Naspers and Prosus, the CEO is required to maintain a Naspers shareholding of four times his annual salary and a Naspers shareholding of six times his annual salary.”
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.