Tiger under pressure

9 January, 2007 at 10:43 am | Posted in Companies | Leave a comment

Profits on share options that were exercised and the value of phantom cash options allocated brought the total remuneration received by Tiger Brands chief executive Nick Dennis to R43.8 million for financial 2006.
Dennis was paid a cash salary of R4.5 million and a bonus of R4.9 million for the year. Other benefits brought his emoluments to R11.1 million. This was little changed from the R11 million he received for financial 2005.
The notes to the group’s financial statements refer to the gains Dennis made through the exercise of options during the year. These gains amounted to R28.2 million.

In addition, the corporate governance report in Tiger Brands’ annual report refers to the adoption of a phantom cash option scheme. At last year’s annual general meeting on February 23, shareholders approved this scheme.Cash options had been granted to four of the group’s executive directors in January last year. The value of the cash options granted to Dennis in 2006 was R4.5 million.

For financial 2006, Tiger reported a 16 percent increase in operating profit before abnormal items. Turnover increased 13 percent. The other four executive directors who received cash options were Clive Vaux, Haydn Franklin, Mike Norris and the newly appointed Noel Doyle.

At the end of September the group issued a Stock Exchange News Service announcement telling shareholders that Norris and Franklin would take early retirement in March. Franklin has been an executive director at Tiger since 1989 and Norris since 2000. The group’s annual report does not appear to make any reference to the early departure of these directors.

The annual report discloses that there was generally good attendance at board meetings, with the exception of Santie Botha, who missed three of the six meetings.

Attendance at committee meetings was patchy. Chris Nissen missed two of the four meetings of the transformation committee, which he chairs. Dennis missed one of these meetings. Barry Adams failed to attend two of the four remuneration committee meetings.

In light of the increasing importance placed on independent non-executive directors and the scrutiny of their claims to independence, it is significant that under UK guidelines, Adams and Brian Connellan would not be deemed to be independent. Adams has been a director since 1992 and Connellan since 1993. The UK guidelines say a director is not deemed to be independent if his association with the company extends beyond nine years. Tiger Brands shares lost 5.1 percent to R166.15 yesterday. The food producers and processors sector fell 0.77 percent.

 (BusRep)

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