Former Woolworths boss Ian Moir’s R44 million farewell

Retail group Woolworths has published its integrated annual report for the 2020 financial year, revealing the pay structure for its top executives – including the farewell package for former boss, Ian More.

Moir resigned as group chief executive officer of Woolworths on 16 February 2020. According to the retailer’s remuneration report, his earnings in the year up to that date totalled just under R14 million. However the former chief is still in line for a bigger payday.

From 17 February Moir earned A$576,215 (R6.95 million at current exchange rates) as acting chief executive for David Jones, and upon his departure from the group, he received a settlement of outstanding leave and 12 months notice pay of A$1.9 million (R22.9 million).

This brings his total exit total close to R44 million, with another R35 million on the cards if he upholds his restraint of trade agreements.

Woolworths’ Remuneration Committee evaluated the restraint of trade agreement for Moir, which had been negotiated in 2013 (prior to the acquisition of David Jones) and determined it was applicable to South Africa only.

In order to protect the group, an extended restraint of trade also covering Australasia was negotiated and, should Moir not breach his obligations, a restraint of trade payment of A$2.9 million (R35 million) is due to him in the 2023 financial year.

As part of such arrangement, it was agreed that no further shares would be issued to Moir in terms of his employment agreement from 2019 onwards. His agreement entitled him to shares to the value of 150% of his guaranteed package per annum.

Moir joined Woolworths in January 2010 and was appointed CEO in November of that year.

He oversaw a period of significant growth and transformation at the group, but also headed the retailer’s troubled venture into Australia through the acquisition of the David Jones brand.

The move began to unravel through a string of changes – notably a head office move to Melbourne from Sydney that required about 75% of the workforce to be replaced. Two write downs of the business followed.

No pay cuts

Woolworths’ current chief executive Roy Bagattini took up his post in February 2020, received a package of R15.7 million for the year. This consisted of a R4.7 million basic salary, and R9.8 million in benefits.

Under benefits, Bagattini’s pay out comprised a conditional sign-on bonus, relocation, and legal costs.

Chief financial officer Reeza Isaacs took home a total salary of R8.2 million for the year (2019: R6.8 million), and chief operating officer Sam Ngumeni’s pay totalled R9.75 million (2019: R8.3 million).

Woolworths South Africa head Zyda Rylands earned R11.7 million, which was only marginally lower than R12 million earned in 2019.

Financial results

Earlier in September Woolworths reported a 54.5% drop in adjusted profit before tax to R2.2 billion for the 52 weeks ended 28 June 2020, citing the impact of Covid-19 on its performance in the second half of the year.

Turnover declined 1.2% to R72.2 billion, while headline earnings per share was down 65.1% to 119.8 cents per share.

Total dividend per share declined 53.3% to 89 cents per share, from 190.5 cents per share.

Woolworths noted that first half adjusted profit before tax was 12.3% below the prior year, at R2.4 billion. “The onset of Covid-19 caused significant disruption to our businesses, resulting in store closures, reduced footfall, lost sales and margin dilution due to promotional and other initiatives to clear inventory.”

Group sales for the current year on a 52-week comparable basis were 0.1% lower compared to the pro forma prior year and declined by 1.1% in constant currency terms.

The sales performance for H2 was significantly impacted by the temporary closure of the majority of the group’s non-food stores, coupled with the decline in foot traffic and resultant loss of trade, it said.

Read: Woolworths earnings tumble on lockdown constraints

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