New Tiger CEO bags R20m ‘sign on’ bonus

Tiger Brands paid new chief executive Lawrence Mac Dougall a sign on bonus of R20 million in 2016. This was disclosed in an annexure to the financial statements in the company’s integrated annual report, published on December 29.

He joined the company on May 10 from Mondelez International (the global confectionary business spun off from Kraft Foods) where he had been president of Eastern Europe, Middle East and Africa at Mondelez International since November 2012. He had been with Cadbury (later bought by Kraft) since 1982.

Mac Dougall’s appointment was announced in March last year, following what the board termed a “rigorous five-month process to interview and select the new CEO”. Aside from the sign on bonus, Mac Dougall earned a further R3.782 million in the less than five months to end September, comprising a “cash salary” of R3.053 million, a bonus of R513 000 and retirement fund contributions and other benefits totaling R216 000. He was also awarded a “a special long-term incentive plan allocation” of 36 000 share appreciation rights (granted at R341.70) as well as 8 160 performance shares (at the same price). By comparison, these numbers of shares are similar to the amounts forfeited by former chief executive Peter Matlare (who has been CEO since 2008).

Chairperson of the group’s remuneration committee, Santie Botha, writes in the report that the “war for talent is at an all-time high and, led by our new CEO, we have reviewed all our pay offerings in a benchmark exercise against the top 100 JSE-listed organisations”. She added that “this review confirmed that our reward structure is in line with best practice”. The group has also, “in line with leading practice… adopted a minimum shareholding policy for our executives, with our top team undertaking to build up their personal shareholdings in the company to target levels”.

Former CEO Matlare, who resigned effective December 31 2015, was paid R8.688 million in the three months to his departure, comprising a R1.187 million cash salary, R786 000 in share options exercised, R209 000 in retirement fund contributions and R6.506 million in “other benefits”. This higher than average figure includes “notice pay, severance pay and leave encashment”. Remarkably, he ‘earned’ a bonus of nearly R1 million (R967 000) in the year prior, after losing R1.5 billion in 24 months during a naïve foray into Nigeria’s milling market. He announced his resignation just eight days into the 2016 financial year on October 8.

Recently appointed group chief financial officer Noel Doyle, who acted as CEO for the five months between Matlare’s departure and Mac Dougall’s arrival, was paid a total of R16.475 million in the 2016 financial year (with a cash salary of R4.716 million and a R836 000 bonus). The vast majority of the total was a R10 million retention bonus, disclosed by Tiger Brands. He was presumably under consideration for the top job. Doyle – then CFO – left Tiger Brands in 2008, during the bread price-fixing scandal, shortly after Nick Dennis resigned as CEO. He returned in 2013 as executive of its grains division and was appointed to the newly-created position of chief operating officer in June 2015 in what could easily be read as part of Matlare’s slow-motion exit.

Olufunke Ighodaro, the group’s former chief financial officer who resigned effective July 31 2016, was paid R10.969 million for the 10 months to her departure. This comprised a cash salary of R3.630 million, R2.742 million in gains on options exercised, R337 000 in retirement contributions and R4.260 in other benefits which, like Matlare, included “notice pay and leave encashment”. This also included a R500 000 “ex gratia payment” relating to Ighodaro’s “swift execution of the… disposal” of Tiger Brands Consumer Goods of Nigeria to Dangote Industries.

Thabi Segoale, Tiger’s executive of ‘corporate strategy and mergers & acquisitions’, was paid a total of R6.546 million for the one month he was still at the company during the 2016 financial year. He had headed the grains business in South Africa from 2007 to 2013 and at one point, was parachuted into Nigeria to try and fix the loss-making milling unit. Segoale quietly left the company on October 30 2015 and his remuneration comprised a salary of R261 000 (with retirement fund contributions of R49 000), a R10 000 bonus, gains on share options exercised of R3.415 million and other benefits, including notice pay and leave encashment, of R2.811 million.

Grattan Kirk, head of the group’s consumer brands unit, was the only other executive to be paid a retention bonus (of R4.028 million) in the year. Kirk’s total remuneration was R8.988 million, with a cash salary of R3.582 million, a bonus of R646 000 and retirement fund contributions and other benefits (excluding the bonus) of R732 000.

Neil Brimacombe, the executive in charge of home, personal care and baby, exports as well as the international business, was paid R5.893 million in the year (with a cash salary of R3.625 million and bonus of R349 000). He was not paid a retention bonus. Tiger Brands announced on November 23 that Brimacombe had resigned and would be leaving the group on January 31.

* Hilton Tarrant works at immedia. He can still be contacted at hilton@moneyweb.co.za.

-Brought to you by Moneyweb