Controversy pays: New Net1 CEO defends Belamant’s $8m golden handshake
Herman Kotze says the biggest portion of his predecessor’s severance package relates to shares he owned in the company
Newly appointed Net1 UEPS Technologies CEO Herman Kotze has defended the $8m (about R103m) severance package paid to its founder and former CEO Serge Belamant‚ saying the biggest portion of the settlement related to the shares he owned in the company.
Belamant agreed to step down amid a storm of controversy over a contract to distribute billions of rand in grant payments to 10.5-million beneficiaries every month.
Addressing the media at Ingeli Forest Resort near Kokstad in KwaZulu-Natal on Thursday‚ Kotze said Belamant had been with the company for decades and that was taken into account in deciding his severance package.
“A variety of numbers have been used in the media. All of them are huge numbers. We acknowledge that and we understand that. But I think we need to put it in context that the biggest portion of the settlement or exit package relates to the purchase of the shares that he owns in the company.
“And as far as the remainder of the settlement package is concerned‚ this was calculated after deliberations between our remuneration committee and Serge over a period of time. We took into account a number of factors. Obviously Serge is the founder of Net1 and has been with the company for 30 years and that was taken into account‚” he said.
The $8m included a $1m cash payment in recognition of Belamant’s lengthy company service and $7m for his “co-operative resignation“‚ the company said in a filing to the US Securities and Exchange Commission on Tuesday.
In addition‚ Belamant would also receive close to $11m for shares that the company would buy back from him‚ plus $475‚266 in stock option payouts.
Over the next two years Belamant would also continue to draw a monthly salary of $50‚000 as a Net1 consultant.
Kotze said the income forfeited by Belamant due to his early retirement at age 63 was taken into consideration.
“So‚ when all of this was taken into account‚ our remuneration committee was of the opinion that the package was in line with industry factors for an international Nasdaq-listed company and is not viewed as extravagant or unjustified‚” he said.
Net1 — the parent company of Cash Paymaster Services (CPS), which disburses social grants — has been at the centre of a legal dispute over whether it can lawfully make deductions from grant payments for micro loans‚ airtime and other financial services.
Respondents in the case‚ including human rights organisation Black Sash‚ claim the loans and other services are marketed to grant recipients in an unscrupulous and irresponsible manner.
But Kotze said there were 1‚500 service providers who had access to the national payment system who effected these debit orders or deductions.
“The most common complaint we get through our call centre is regarding debit orders or deductions‚” said Kotze.
He said Net1 had established an independent ombudsman to deal with the complaints.
Kotze also said he was not aware of allegations that the Financial Services Board (FSB) was investigating Net1 or CPS.