COMPANY COMMENT: Precedents, quandaries in Whitey Basson repurchase
The proposed repurchase doesn’t make much sense — and it sets a troubling precedent
At the recent Shoprite results presentation there was no shortage of fund managers and analysts happy to back any agreement the company might have had with former CEO Whitey Basson. That’s even though many of them couldn’t understand the thinking behind the controversial agreement obliging Shoprite to repurchase Basson’s shares.The results were better than expected and, in a week when other retailers were announcing grim figures, it reminded everyone of just how valuable an asset Basson built up during his 37 years as CEO. The proposed repurchase doesn’t make much sense — and it sets a troubling precedent. In the monkey-see, monkey-do world of executive pay, precedents are dangerous things. How many retail executives are being awarded an inappropriately large remuneration package merely because they have the same title as Basson? That’s what benchmarking exercises do. There’s a good chance the resolution, which needs 75%, will not get sufficient support from shareholders. The Public...
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