ROB ROSE: Rewarding the wrong things
Bonuses paid at struggling hospital company Mediclinic show how executive reward is based on bad metrics
For Mediclinic, the company that has managed to erase 70% of its shareholder value over three years, the FM’s report last week (https://www.businesslive.co.za/fm/fm-fox/2019-07-04-windfall-for-mediclinic-execs--despite-70-share-slump/) querying why it’s paying bonuses to its directors this year didn’t go down well.
For the record, CEO Ronnie van der Merwe got a short-term incentive bonus of £110,000 in addition to his overall package of £447,000. Finance director Jurgens Myburgh took home an £87,000 bonus, besides his £396,000 package.