Fin24 reports that Shoprite CEO Pieter Engelbrecht took home a total pay package of R64.66 million (including long-term incentives) in the 2023 financial year – just over half of the staggering R122.4 million that Woolworths CEO Roy Bagattini earned in the same period.
Even without long-term incentives, Bagattini still earned R10 million more than Engelbrecht. This was despite the fact that Shoprite's market value of R140 billion dwarfs the R46 billion of Woolworths. It also has a much larger footprint in terms of stores. But market analysts point out that a host of different factors are considered by company remuneration committees when deciding on pay packages and how they are structured, including share price performance. Furthermore, with both Woolworths and Shoprite delivering strong results of late, it is likely their shareholders will not be unhappy with the big paydays for the CEOs. Protea Capital Management’s Jean Pierre Verster pointed out that when comparing the remuneration of different CEOs, it was always important to recognise that a typical remuneration package included a basic salary, as well as short-term and long-term incentives. If one wanted to analyse a remuneration package paid in a single year and compare two CEOs, it was necessary to exclude long-term incentives because that remuneration did not necessarily apply to the year in question. For Verster, focusing on the basic salary and short-term incentives (like bonuses) paid was the best way to get a proper picture. Excluding the long-term incentives of R26.82 million that Engelbrecht received in 2023 but earned in previous years, left him with basic pay and short-term incentives of about R38 million. Stripping out the long-term share options of R66.7 million awarded to Bagattini three years ago, along with R7.1 million in share dividends, he took home a total basic pay with short-term annual incentives of about R48.4 million.
- Read the full original of the report in the above regard by Nick Wilson at Fin24 (subscriber access only)
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