MultiChoice shareholders voiced their displeasure at the company’s remuneration for executives and non-executive directors at its annual general meeting (AGM).
Remuneration issues were the most contentious votes at the meeting held on Wednesday, 28 August 2024.
The vote on the endorsement of the company’s remuneration policy saw 17.89% of the total issued shares abstain, while 6.36% of the remaining shares voted against the policy.
While 6.36% against doesn’t sound like much, it is important to view this in the context of the other resolutions tabled at the AGM.
No other resolutions at the meeting had any abstentions, and the next-highest vote percentage against a resolution unrelated to remuneration was 3.4%.
The other resolutions involving remuneration received even more votes against, although both passed.
A resolution for the endorsement of the implementation of the remuneration policy had 23.65% votes against, while 14.1% voted against approving the remuneration of non-executive directors.
MultiChoice executive and director pay has come under fire recently, especially after the company’s dismal financial performance.
MultiChoice CEO Calvo Mawela, CFO Tim Jacobs, and former chairman Imtiaz Patel were paid R127 million despite the company reporting its worst financial results since it was founded.
The company’s 2024 annual report revealed that Mawela was paid R53 million in the last financial year.
His pay package included a base salary of R12.8 million, short-term incentives of R8.1 million, and long-term incentives of R25.6 million.
Controversially, Mawela also received R4.7 million in benefits, including medical, fringe, family, travel, and long-service and disability benefits.
Jacobs received a pay package of R28.9 million last year. His benefits amount to R1.2 million and include a “European contract”.
Former MultiChoice non-executive chairman Imtiaz Patel, who stepped down on 23 April 2024, received R45.7 million last year.
MultiChoice explained that Patel did not receive director or meeting fees. Instead, he received an annual fee of $1 million relating to the service and restraint agreement. He also received travel reimbursements related to business travel.
“Patel played a leading role in the successful completion of the Showmax deal with Comcast during the 2024 financial year,” the company said.
“He started developing the deal over the Covid period while executive chairman when discussions commenced for a strategic partner.”
On the recommendation of MultiChoice’s remuneration committee at the time, a bonus of $1.25 million was approved.
Therefore, Patel received $2.509 million over the last financial year, translating into roughly R45.7 million.
Following Patel’s departure, MultiChoice’s new chairman, Elias Masilela, said the fees paid to certain board members were under review and likely to be stopped.
“These were legacy contracts that were necessary for the company,” said Masilela.
“We know that when you employ board members, you employ people who are experts in their own fields as it may be quicker to get an answer from them on a technical aspect rather than getting that from the outside, which can take longer.”
This came to a head recently with MultiChoice’s longest-serving board member, Jim Volkwyn.
One of MultiChoice’s major shareholders, the Public Investment Corporation (PIC), vowed to oppose Volkwyn’s re-election, saying it would be a breach of corporate governance principles otherwise.
Among its concerns was that Volkwyn received over R10 million in fees since his agreement with the media giant started in 2018. The agreement was set to expire in 2028.
“There have to be consequences where corporates are tone deaf and create structures that are used to undermine the principles of corporate governance,” PIC chairperson and deputy finance minister David Masondo said.
The PIC is the South African government’s investment arm and Africa’s biggest asset manager. It counts the Government Employee Pension Fund among its clients.
It holds a 15% stake in MultiChoice.
Following the PIC’s public statements on the issue, Volkwyn decided not to stand for re-election to the board and retire from MultiChoice.
This is not the first time shareholders have registered disagreement with MultiChoice’s remuneration practices.
Last year, only 2.26% voted against the endorsement of the remuneration policy, but 15.84% voted against the proposed remuneration of non-executive directors.
However, in 2022, 3.65% opposed the policy, 31.7% voted against endorsing the remuneration implementation report, and 11.17% voted against the proposed remuneration of non-executive directors.
Another notable vote was the re-election of Patel as a director, which 29.08% of shareholders opposed. The other directors up for re-election — Elias Masilela and Louisa Stevens — received over 99% votes in favour.
There was a shareholder revolt in 2021, with 64.23% voting against the company’s remuneration policy and 18% opposing the resolution on the remuneration of non-executive directors.
Similar to the year before, there was a vote to re-elect certain board members. Volkwyn was up for re-election, and 34.11% of shareholders voted against it.
There were very few abstentions in 2021, 2022, or 2023.
“We have a large shareholder base, and it is quite normal for shareholders to have different views,” a MultiChoice spokesperson said in response to questions about the remuneration votes at the 2024 AGM.
“It is not always possible to please everyone, but we follow a pragmatic approach and try to find as much common ground as possible between shareholders.”
MultiChoice said it was grateful that shareholders supported all the resolutions.
“Receiving another high vote of support for our remuneration policy (94%) confirms that we are on the right track,” it said.
“The vote for the implementation report (76%) was above the threshold required by King IV, but was lower than last year mainly due to one of our larger local shareholders having a different view on one of the metrics that applied to a specific set of historic awards.”
MultiChoice said that as this won’t be applicable in future, the issue is not a recurring one.
“Nonetheless, we will keep up efforts of engaging shareholders and enhancing policies and disclosure where applicable.
