As Steinhoff's share price edges ever closer to an all-time low, the troubled retailer plans to reward its directors for doing an "exceptionally demanding" job despite the company wiping out almost €12-billion (about R174-billion) of shareholders' money in an accounting scandal last year.
Steinhoff, whose share price dropped as low as R2.95 on Friday, proposed in its annual general meeting notice that its interim chair, Heather Sonn, receive €200 000 and supervisory board member Johan van Zyl €100 000 because of the "exceptional demands" of the job.
According to Steinhoff's 2016 annual report, Sonn, who at that stage served as a member of the company's supervisory group, earned €9 000 a year. Van Zyl, who was also a member of the supervisory board, earned €34 000 a year.
The group said the remuneration structure was determined in view of its competitors and peer companies "as well as considering the need to retain and attract supervisory directors in light of the company's situation".
"The proposed remuneration is not linked to Steinhoff's share price or performance," it added.
In addition, Steve Booysen, head of the audit committee and former Absa CEO, will receive €200 000, doubling what he earned in 2016.
An analyst who did not want to be named described the remuneration structure at Steinhoff as "complicated given the accounting irregularities".
"They will have to strike a balance, making sure that people don't leave because of the high risk that comes with the business," the analyst added. And to do that, they would have to benchmark against the remuneration packages of other European retail boards, the analyst said.
In response to questions about justifying the remuneration, Steinhoff said: "The proposed amounts are a fair reflection of the extraordinary effort and people that are required in order to stabilise the company and restore value to investors.
"In doing so, the members of the management and supervisory boards are required, inter alia, to make extraordinary time commitments and be readily available for unscheduled, ad-hoc meetings, and deal with stakeholders such as regulators, investors and shareholders.
"To achieve this the management and supervisory boards have been restructured with new members who have the scarce and critical skills that are required to address the complexity of the situation."
Remuneration is not linked to Steinhoff's share price or performance
— From annual report
Michael Jacks, director of equity research at Arqaam Capital, said he believed shareholders would not vote against the remuneration proposals.
"You need to look at the type of work and the complexity involved," Jacks said.
"If you look at Sonn's total suggested remuneration, it's not out of line with what CEOs and directors earn in South Africa. And they are probably working around the clock on this scandal."
Jacks said compared to what former CEO Markus Jooste used to earn, the packages were "reasonable". Jooste earned €5.6-million a year, according to Steinhoff's 2016 annual report.
The group has been selling off assets to improve its liquidity position.
Graeme Korner, a fund manager at Korner Perspective, said the directors do a job and they have to be "fairly remunerated for that. While it sounds like a lot of money, I would argue that people like Sonn and Van Zyl have probably earned their money."
Korner said this placed the group in a precarious position as its share price had fallen by over 90%. "How can you justify paying the directors?" he said, adding: "But the problem is that if they are doing the job, they deserve to be remunerated. The fact that the net asset value is down over 90% is irrelevant, the board still has a job to do."
Shareholders are expected to vote on the resolution on April 20 in Amsterdam. Steinhoff shares fell more than 24% over the past week and ended trade on Friday at R3.09, its lowest level since September 1999.
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