Marc Hasenfuss Editor-at-large

Johann Rupert, chairman of Stellenbosch-based investment behemoth Remgro, has called on shareholders to help find an appropriate structure for remunerating executives.

At Remgro’s annual general meeting on Wednesday some resistance was shown in the nonbinding advisory vote on the remuneration policy, with almost 19% of shareholders against the resolution.

Rupert said the votes against were closer to 40% if the Rupert family vote were stripped out. He believed the votes against stemmed from Remgro not having clear key performance indicators (KPIs).

"I’d like to ask these investors to advise us how they would like us to set up these KPIs. It’s difficult when you’re a diversified investment holding company to apportion blame or reward."

Help us set up a better system. It will help if we can work together to find a better solution for all
Johann Rupert

Rupert said he had empathy with investors on the remuneration issue. "Help us set up a better system. It will help if we can work together to find a better solution for all." However, he said, "people" (asset managers) who voted against the resolution operated on cost structures that were markedly higher than those incurred by Remgro.

The meeting also heard that Remgro would not consider an unbundling of its majority shareholding in private hospitals group Mediclinic International, which has a primary listing on the London Stock Exchange and a secondary listing on the JSE.

The unbundling issue was raised by shareholder activist Chris Logan, who argued that such a development could unlock the holding company discount placed on Remgro’s shares and increase the group’s exposure to unlisted investments. He believed Mediclinic had a "superior listing" to Remgro in the form of its primary listing in London.

Logan also said an unbundling of Mediclinic — which represents about 30% of Remgro’s portfolio — could remove potential funding challenges as the private hospital group pursued growth opportunities.

Rupert said there were no plans to spin off Mediclinic. "Mediclinic is a well-run business that has had very bad financial advice on deals."

Mediclinic, which has acquired private hospital groups in Switzerland, the Middle East and the UK, has seen its share price ailing. In the year to date it had shed 25% and dragged on Remgro’s share price.

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