Boxes of Jungle Oats, one of South Africa's Tiger Brands original products. Picture: REUTERS, MIKE HUTCHINGS
Boxes of Jungle Oats, one of South Africa's Tiger Brands original products. Picture: REUTERS, MIKE HUTCHINGS

Months after taking a R2.2bn write-down on its disastrous Nigerian acquisition, Tiger Brands’ remuneration committee raised the fees of the directors who had overseen the decision to invest in the value- destroying Dangote Flour Mills.

The group’s just-released annual report makes little direct mention of the Dangote venture, but the report is pock marked by its effect. It was followed by the resignation of senior executives, prompted a major strategic review of the group’s business, and hefty additional payments were required to attract and retain executive talent.

Following the resignations of former CEO Peter Matlare and chief financial officer Funke Ighodaro, the top three group executives at one of the country’s highest-profile food groups are once again white males.

Matlare was replaced by Lawrence MacDougall after what departing chairman Andre Parker describes as a "rigorous five-month (search) process". Noel Doyle, who assumed the CEO’s role during the five months, has replaced Ighodaro as CFO. Ighodaro resigned in July 2016. Clive Vaux is corporate finance director.

Mac Dougall was paid a R20m sign-on bonus to entice him to take on Matlare’s job. This brought his payout for the five months to R23.8m. Doyle, who had slotted into the top job for the five months between Matlare’s departure and Mac Dougall’s arrival was paid a R10m retention bonus to ensure he remained with the group. This brought his remuneration package for the year to R16.5m.

Grattan Kirk, who joined Tiger Brands as business executive of consumer brands from JD Group in 2013, was paid a retention bonus of R4m. This brought Kirk’s total payment for the year to R9m. Kirk and Doyle are understood to be among the six internal candidates who applied for Matlare’s position.

Matlare received R8.7m for the four months he served before resigning in December 2015. The payment included R6.5m of benefits.

The nonexecutive directors also did well despite their involvement in the Nigerian deal. A review of nonexecutive directors’ remuneration was undertaken in 2015 and, according to the latest remuneration report, this review formed the basis for increases effective from March 1 2016.

The 2016 annual report deals extensively with the strategic review launched in the past financial year. Analysts say a successful review is needed to re invigorate management and distance the group from the damage to its reputation.

In his chairman’s review, Parker says the group is successfully emerging from a challenging period. "A comprehensive strategy review is under way." The plans for "sustainable growth in SA and further afield, supported by key metrics and clear targets", would be outlined in the 2017 financial year.

The board has given the management a clear mandate to position Tiger Brands for sustainable, profitable growth.

"While we understand that there are opportunities for short-term improvements, we are taking a longer-term view to capitalise on the group’s inherent strengths, which include its portfolio of leading brands, a sound manufacturing architecture and people skills," said Parker. The review is expected to take about 18 months.

In the review of its operating environment, the annual report refers to the poor forecasts for economic growth and weak private consumption in financial 2017. An improvement in these forecasts would depend on satisfactory resolutions of some political issues, it said.

Please sign in or register to comment.