EXECUTIVE pay is a hot topic for shareholder and stakeholder activists, but nothing gets the blood pumping faster than a CEO who walks away from a disastrous performance with a substantial golden parachute. "Companies need to reconsider the way they handle CEO terminations to avoid arousing controversy and appearing to pay for failure," says Martin Hopkins, executive committee member at the South African Reward Association (Sara) and a partner at PwC in its people and organisation practice. For example, in 2015 then MTN CEO Sifiso Dabengwa received a golden parachute of R24m after the group was fined $5.1bn for ignoring the Nigerian government’s repeated calls for it to identify customers, in an effort to curb Boko Haram militants using cellphones to co-ordinate attacks and trade oil for arms. After firing Dabengwa, MTN paid R1.3bn in adviser fees to negotiate the fine down to about $1.7bn. "We must recognise that there may be sound commercial reasons why companies take the pragmati...

BL Premium

This article is reserved for our subscribers.

A subscription helps you enjoy the best of our business content every day along with benefits such as exclusive Financial Times articles, ProfileData financial data, and digital access to the Sunday Times and Sunday Times Daily.

Already subscribed? Simply sign in below.



Questions or problems? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now