Santam CEO Lize Lambrechts. Picture: HETTY ZANTMAN
Santam CEO Lize Lambrechts. Picture: HETTY ZANTMAN

Despite short-term insurer Santam reporting a much stronger performance than the previous year, CEO Lize Lambrechts saw her total remuneration halve in financial 2018 as a result of the nonpayment of cash bonuses. 

In 2018 Santam’s headline earnings shot up 47% to R20.99 a share. But the absence of cash bonuses in that year saw Lambrechts take a 50% cut in total remuneration to R16.6m from the previous year’s R33m, according to the group’s recently released remuneration report.

Lambrechts’ total remuneration of R16.6m for 2018 included a guaranteed package of R5.5m, a bonus of R6.9m and long-term incentives of R4.2m.

In 2017, Lambrechts’ remuneration package was boosted by the payment of a R19m made in terms of the group’s Outperformance Plan (OPP), one of Santam’s five long-term incentive plans. The plan is designed to reward “superior performance over a three-to five-year measurement period”, according to the remuneration report.

Lambrechts’ OPP payment was for the three years from 2015 to December 2017. In that time earnings dropped from R18.44 a share in 2015 to a low of R10.86 in 2016 before recovering to R14.25 in 2017. 

A note in the latest remuneration report states that Lambrechts did not participate in the group’s OPP  in 2018. The remuneration report did not explain why she was no longer participating, but company secretary Masood Allie told Business Day that the three-year OPP that vested in December 2017 was not renewed in 2018.

“A new OPP for Ms Lambrechts may be put in place in future,” said Allie.

The OPP bonus payment for 2017 meant Lambrechts was the highest-paid South African executive among listed insurance companies. The bonus payment provoked criticism from shareholder activist Theo Botha who slammed the poor levels of disclosure dealing with it.

Botha said the R19m was paid for performances during the previous three years but there had been little information provided in the remuneration reports of those years.

At Sanlam’s annual general meeting in June 2018, Botha criticised the poor disclosure of its short-term insurance subsidiary, as well as the fact that Sanlam CEO Ian Kirk was chair of Santam’s human resources and remuneration committee.

Botha said Kirk’s position was a contravention of the King Code, which recommends that the chair of the remuneration committee be a nonexecutive and independent director. He said it was impossible to describe Kirk as independent.

Santam’s just-released Integrated Report reveals that Kirk continues to hold the position of chair of the human resources and remuneration committee.

At  the 2018 Santam annual general meeting, 13.2% of shareholders voted against the remuneration implementation report. A similar number of shareholders voted against the report at the previous year’s annual general meeting.

Botha said the level of opposition was substantial considering Sanlam’s 59% holding was voted in support of the remuneration report.