South African Sasol group’s annual general meeting (AGM) was shaken with a decision issued by the remuneration committee to change the key performance indicators (KPIs) for executives, in a year when company earnings were hit by a slump in oil prices, BussinessDay reported.
The influence of company earnings in determining executives’ short-term incentives was reduced from 55% in 2014 to 35%, while Sasol’s headline earnings a share fell 17% in this period compared to last year.
A shareholder activist, Theo Botha was reported as saying that although executives earned slightly less overall, the fact that their long-term incentives were above 100% of their basic salaries, while the firm had shed 2,500 jobs, and was driving cost savings across the business, was sending the wrong message.
According to the annual report, the net base salary earned by company’s CE, David Constable rose 4% to $935,618 this year from $899,633 last year, while his net short-term incentives fell by 40% to $1.03m from $1.7m.
Sasol’s remuneration committee stated that the KPI change was requested by shareholders, and the earnings weighting would be reduced to 30% in 2015.