MTN boss Phuthuma Nhleko gets R72m package
Shareholders are expected to raise concern over executives’ big remuneration packages
Phuthuma Nhleko, who has played a critical role in the direction of MTN since he was first appointed CEO in 2002, has been awarded a R72m package for financial 2016.
Nhleko, who parachuted back into an executive role after the Nigerian crisis hit the company in November 2015, received an agreed-upon service fee of R30m. In addition, the board awarded him an ex-gratia fee of R38m.
And, because he continued as chairman of the MTN group, Nhleko also received R4m in nonexecutive director’s fees for the period during which he was an executive.
Nhleko has been a member of MTN’s remuneration committee for years. He is also chairman of the nominations committee, although during 2016, when Nhleko was MTN executive chairman, Alan van Biljon led discussions.
MTN reported a headline earnings loss of 77c a share in 2016 as it battled the fallout from a Nigerian fine. After months of negotiations, the original $5.2bn fine was cut to $1.7bn.
The group’s remuneration report identified critical contributions from Nhleko, including leading the Nigerian negotiations, re-establishing a working relationship with the Nigerian authorities and a new R9.9bn empowerment scheme.
Although at no stage any executive or group of executives had been assigned responsibility for the Nigerian problems, former CEO Sifiso Dabengwa resigned in November 2015, just weeks after the news broke.
Dabengwa, who had been nominated to the position by Nhleko in 2011, was given a R40.6m package, which included a loss of office payment of R23.6m. Dabengwa did not play any executive role in 2016, but he received remuneration of R19.5m for the year.
Although shareholders were relieved to have escaped the worst of the Nigerian challenges, they are expected to raise concern about the generosity shown to the executives.