The Coronation Fund Managers’ Trust bought shares worth tens of millions in the past two weeks as part of its bonus pool even after questions were raised about its bonus policy.
Revenue fell 7% to R4.4-billion, while pretax profits dropped 10% to R2.4-billion. Diluted earnings per share declined 9.7% to 516c.
Shareholder activist Theo Botha lodged a Promotion of Access to Information Act (PAIA) request at the group’s annual general meeting (AGM) on January 15, claiming the company’s remuneration policy was opaque.
On that day, the trust bought Coronation shares worth R18.3-million according to filings with the JSE. Last week, it bought another block of shares worth R50.5-million. It had bought shares worth R13.3-million days before the AGM.
The trust receives 30% of the group’s pretax profits after deductions for cash bonuses and restraint of trade payments. It also buys Coronation shares or products on behalf of its employees.
A representative for Coronation, who declined to be named, said this week the 30% of the profits allocated to the trust was contractually binding and could not be changed.
“This has been in place since the inception of the company and is fundamental to its success over the past 22 years. As the group’s annual pretax profit changes from year to year, so does the bonus pool.
“This aligns the company with stakeholders through periods of increasing and decreasing profitability.”
The representative said the company did not disclose the portion of the annual bonus pool that was housed in the trust, as the information was competitively sensitive.
Most of Coronation’s major competitors were unlisted. Coronation’s corporate governance register dated last month and compiled by the Institute of Directors in Southern Africa shows it does not comply with the principle dealing with shareholder approval of remuneration policy.
Coronation’s explanation to the institute was that the policy was contractually binding, and was included in its prelisting statement.
It told shareholders in its 2003 prelisting statement that the bonus pool was allocated by a committee comprising chief executive Anton Pillay and chief investment officer Karl Leinberger and sent to the company’s remuneration committee.
The representative said the remuneration committee considered each proposal.
“The authority to approve all aspects of employee remuneration vests with the remuneration committee.”
Coronation shares under scrutiny
Revenue fell 7% to R4.4-billion, while pretax profits dropped 10% to R2.4-billion. Diluted earnings per share declined 9.7% to 516c.
Shareholder activist Theo Botha lodged a Promotion of Access to Information Act (PAIA) request at the group’s annual general meeting (AGM) on January 15, claiming the company’s remuneration policy was opaque.
On that day, the trust bought Coronation shares worth R18.3-million according to filings with the JSE. Last week, it bought another block of shares worth R50.5-million. It had bought shares worth R13.3-million days before the AGM.
The trust receives 30% of the group’s pretax profits after deductions for cash bonuses and restraint of trade payments. It also buys Coronation shares or products on behalf of its employees.
A representative for Coronation, who declined to be named, said this week the 30% of the profits allocated to the trust was contractually binding and could not be changed.
“This has been in place since the inception of the company and is fundamental to its success over the past 22 years. As the group’s annual pretax profit changes from year to year, so does the bonus pool.
“This aligns the company with stakeholders through periods of increasing and decreasing profitability.”
The representative said the company did not disclose the portion of the annual bonus pool that was housed in the trust, as the information was competitively sensitive.
Most of Coronation’s major competitors were unlisted. Coronation’s corporate governance register dated last month and compiled by the Institute of Directors in Southern Africa shows it does not comply with the principle dealing with shareholder approval of remuneration policy.
Coronation’s explanation to the institute was that the policy was contractually binding, and was included in its prelisting statement.
It told shareholders in its 2003 prelisting statement that the bonus pool was allocated by a committee comprising chief executive Anton Pillay and chief investment officer Karl Leinberger and sent to the company’s remuneration committee.
The representative said the remuneration committee considered each proposal.
“The authority to approve all aspects of employee remuneration vests with the remuneration committee.”
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