Moir’s exit pay gets a big no

An unprecedented 82.24% of shareholders voted against Woolworths’ remuneration implementation report at the group’s annual general meeting on Wednesday, in what was largely seen as a protest against a generous exit package granted to former CEO Ian Moir.

The two resolutions on remuneration – one on the policy, the other on the implementation of it – are non-binding advisory votes.

The votes are intended just to send a message to the board, and the board is not bound by the vote.

Moir championed the R21.4 billion acquisition of Australia-based retailer David Jones in 2014, which required a hefty rights issue, as well as the taking on of substantial debt.

By 2019, the group had been forced to write off R13 billion of the David Jones balance sheet value, as the Moir-led management team failed to turn around the struggling Australian retailer.

In Moir’s defence, the ambitious plan did receive shareholder support in 2014.

The share price shot up to an all-time high of R108 in 2015 on the back of bullish expectations for what was then the largest
retailer in the southern hemisphere.

In his 2016 report, former chair Simon Susman told shareholders having a large Australian business (Country Road and David Jones) had helped to cushion the group from the shock of former finance minister Nhlanhla Nene’s firing in December 2015.

Since that 2015 peak the share price has slumped 66% to the current R37. In February this year, Woolworths announced Moir was stepping down as CEO.

However, shareholders were outraged when it emerged that Woolworths had committed to paying him R77 million.

Slightly over half of that sum – R43 million – is payment for 2020, but the more shocking portion is a R34.3 million restraint of trade payment.

This will be paid to Moir in 2023 if he adheres to the terms of the restraint.

At the AGM, remuneration committee chair Zarina Bassa said the R44 million “exit arrangement” had allowed for a seamless transition between Moir and new CEO Roy Bagattini.

This article first appeared on Moneyweb and was republished with permission.

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