Investors reject pay policy of Burger King franchise holder
As many as 60.6% of votes cast at Grand Parade Investments's annual general meeting went against the remuneration policy
Grand Parade Investments (GPI), which represents Burger King in SA, became the second company in a week to have its pay policy rejected by investors.
“I think shareholders know that fundamentally Grand Parade has not performed for at least three years, so why should the revolving door of management get performance bonuses and pay increases?,” said independent analyst Anthony Clark.
As many as 60.6% of votes cast at the company’s annual general meeting (AGM) on Wednesday evening went against the remuneration policy.
Last week, shareholders of Spur Corporation, which counts Grand Parade as a major investor, voted down the group’s pay policy with as much as 74.9% of the vote.
Wednesday’s meeting came at a tumultuous time for GPI, which lost another CEO on Monday when Prabashinee Moodley resigned after less than five months in the job. She became the third CEO to leave in less than two years.
At the time, the board gave a cryptic explanation for her departure.
"Given Ms Moodley’s passion and expertise in food service and retail, Ms Moodley has decided to step down from her position due to the current market sentiment with regards to the quick-service restaurant industry,” the company said.
Her resignation came days after a group of shareholder activists managed to vote two new nonexecutive directors – former SABMiller executive Mark Bowman and former Spur finance chief Ronel van Dijk – onto the beleaguered board.
The activists have argued that the board does not have the requisite skills to build a quick-service restaurant empire.
At the AGM, a large chunk of investors indicated that they were keen on a shake-up of the company’s audit and risk committee.
Just 51% of votes cast approved the reappointment of Walter Geach as a member of that committee, and 59% agreed that Norman Maharaj should stay on in that role.
Clark said while concerns were raised about pay and the lack of diversity on the board, the AGM “was much more restrained, dignified and respectful” compared with recent meetings with shareholders.
According to Clark, management spoke of plans to expand the Burger King chain, though seven unprofitable stores had been earmarked for closure. Management also said, once again, that the Dunkin’ and Baskin-Robbins brands would be cut from the portfolio.
The company’s shares closed 3.4% lower at R3.38 on Thursday. The stock is in positive territory for the year to date but remains well below the highs of nearly R8 reached in 2014.
Besides its fast-food interests, GPI holds minority stakes in the GrandWest Casino, the Golden Valley Casino in Worcester, limited-payout-machine specialist SunSlots and a property on Cape Town’s Foreshore.