earningsBL Premium reports that RCL’s decision to help top executives cash out of a supposed long-term share incentive scheme has infuriated shareholder activists and embarrassed parent company Remgro.  

In short, RCL Foods — a perennial underperformer — is set to fork out R149m to buy executives out of a conditional share plan after just three years, during which time the company’s share price has fallen by more than a third.  The 14.5-million shares were due to be transferred to the relevant RCL executives last week.  RCL argued that the company’s "extremely limited free float, low trading volumes and lack of tradability severely restrict the ability of the participants to trade in these shares".  But shareholder activists have slammed the scheme as unfair for affording executives special treatment not extended to other shareholders.  Supposedly, RCL’s conditional share plan (CSP) is meant to attract individuals or retain employees with an award of shares in the company and encourage their continued service.  But activist Theo Botha asked:  "How do we encourage continued service by these top employees if we are facilitating a payout?  This defies logic."  Remgro CEO and RCL chair Jannie Durand said the CSP had become an administrative nightmare.  Durand conceded that in retrospect RCL’s CSP should have offered a cash option.

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