The directors of Lewis Group scored big on Tuesday after the furniture and household goods retailer were offered free shares worth millions of rands under the company’s long-term and short-term executive performance scheme.
Lewis Group is a credit retailer selling household furniture and electrical appliances through three trading brands – Lewis Stores, Best Home and Electric, and more recently Beares.
In terms of the scheme, six executives were offered the right to acquire shares of the company for no consideration subject to the achievement of performance targets.
Lewis chief executive officer, Johan Enslin, scored 219 498 shares worth R 7.15 million based on a market price of R32.57 per share. The other five directors were given shares worth between R3.2 million and R5.4 million.
Lewis said the share awards under this scheme would lapse should the executive terminate his or her employment before the completion of the period of the award other than in the event of death, ill-health, retirement or retrenchment.
Lewis’ Remuneration Committee agreed to grant the executives a three-year award, that is a short-term award, under this scheme.
Lewis said the performance targets were set by the Remuneration Committee at the beginning of the each of the three years and were based on a weighting set for each executive of headline earnings per share, the quality of the debtors book, and gross margin.
In May, Lewis Group’s revenue for the year ended 31 March declined 3.3 percent to R5.6 billion from the previous year. Headline earnings declined from R552 million to R355 million, with headline earnings per share 35.6 percent lower at 400.1 cents.
On Monday, Lewis Stores won against an application by the National Credit Regulator (NCR) in relation to the charging of club fees and extended warranties to customers, which pushes up the cost of buying furniture on credit.