Nearly two-thirds of shareholders give EOH thumbs down on remuneration policy
A whopping65.36% of embattled IT group EOH’s shareholders have shot down the company’sremuneration policy. At the company’s annual general meeting held onFriday morning, the same number of shareholders also voted against theremuneration implementation report.
Althoughshareholders’ vote on remuneration matters is not binding to companies in SouthAfrica, EOH is compelled to engage the dissenting shareholders according to theJSE regulations if more than 25% of those present opposed it.
In astatement published after the AGM, EOH invited shareholders who had not yetengaged with it regarding their concerns to get in touch with the chairpersonof its nomination and remuneration Committee, Ismail Mamoojee.
"EOH willconsider all concerns and take steps to address legitimate and reasonableobjections and concerns," said the company.
Theshareholders’ dissenting vote on EOH’s executive pay comes as the company isstill trying to clean its image and win back investors’ confidence, followingrevelations that it was involved in corrupt tenders. As more allegations emerged, shareholders lost billions ofrands as the company’s share price plummeted from a high of R171 in December 2016 to just R12.55 by Friday at midday. An investigation by ENSAfrica uncovered some R1.2bn of "suspicious transactions", primarily in the public sector.
Current CEO Stephen van Coller, who was appointed in September last year, hastried to restore confidence by playing open cards - including releasing the results of ENSAfrica’s report - and shareholders voted overwhelmingly in favour of his other proposedspecial resolutions, including buying back the company’s shares andthe disposal of some of its businesses.
AviorCapital Markets analyst, Ruhan du Plessis, said this showed shareholders weresatisfied with the direction in which Van Coller was taking the organisation, but maybe there were specific reasons they were not happy with the remunerationproposals.
"He’s been very open about his strategy. He’s gone around askingshareholders what they would like to see happen, and the fact that they votedfor that shows they are in line with what management is doing," said Du Plessis.
EOH’s shareprice fell 2.6% after the AGM, reaching an intraday low of R12.38. But it wasstill 37% higher than the R9 multi-year low of R9, reached earlier in 2019.