R140 million pay cut for South African mining boss – BusinessTech
Sibanye Stillwater CEO Neal Froneman received a R56 million payday in 2023 – a significant drop from the R291 million he received in 2021.
Froneman recently said that the fall of Platinum Group Metals (PGMS) prices had the most significant impact on Sibanye’s business following a post-Covid boom.
The price of PGMS dropped significantly amid destocking from the auto industry and weaker-than-expected demand from China.
PGMs are primarily used in catalytic converters in internal combustion engines (ICE) to reduce their emissions. However, the rise of electric cars has called into question the need for a tool that reduces emissions.
For the financial year ended 31 December 2023, the group reported a R37.9 billion loss after taking an impairment against its US palladium mine.
Amid the group’s financial woes, it said it laid off 2,600 workers in February. This was to ensure the sustainability of its South African PGM operations.
However, the jobs bloodbath is set to continue, with the group again entering into Section 189A consultations earlier this month.
4,000 jobs in South Africa are on the line in the latest set of retrenchments, with the group hoping to restructure its gold operations and Southern Africa region services functions.
The group’s executives also felt the pain amid the group’s struggles, with the total single-figure remuneration among the ten highest-ranking executives dropping from R795 million in 2023 to R588 million in 2022 and then R235 million in 2023.
Froneman’s pay has often been a point of contention, with the CEO earning an eye-watering R291 million in single-figure remuneration in 2021, even if a large amount of this was linked to long-term share incentives awarded in 2018.
The figure then dropped to just over R198 million in 2022 before hitting R56 million in 2023.
The pay of the group’s 10 senior executives (R’000):
| Executive | Position | 2021 | 2022 | 2023 |
| Neal Froneman | Chief Executive Officer | R291 582 | R198 032 | R56 334 |
| Charl Keyter | Chief Financial Officer | R143 428 | R87 482 | R25 701 |
| Charles Carter* | Chief Regional Officer: Americas | – | R17 008 | R24 322 |
| Dawie Mostert** | Chief Organisational Growth Officer | R71 734 | R50 765 | R14 513 |
| Laurent Charbonnier | Chief Commercial Officer | R23 472 | R24 102 | R23 548 |
| Lerato Legong | Chief Legal Officer | R7 679 | R9 553 | R10 760 |
| Mika Seitovirta*** | Chief Regional Officer: Europe | R245 | R15 899 | R23 971 |
| Richard Stewart | Chief Regional Officer: Southern Africa | R83 011 | R60 125 | R19 947 |
| Robert van Niekerk | Chief Technical Officer | R114 686 | R78 632 | R21 856 |
| Themba Nkosi | Chief People Officer | R58 648 | R46 480 | R14 369 |
| Total | R794 485 | R588 078 | R235 321 |
Not all bad
Amid the group’s financial woes after the last year, its share price dropped from around R40 a share a year ago to roughly R22 per share today.
That said, Froneman was relatively unscathed by the drop in share price after exercising a put option.
A put option is a contract which gives the option buyer the right, but not the obligation, to sell a specified number of shares at a predetermined price within a stipulated time frame.
The predetermined price at which the put option buyer can sell the underlying security is called the strike price.
On Tuesday, 5 March, Froneman exercised his put option at a strike price of R66.24 when the share price was just around R18.00.
The last time the share price was at the R66 mark was in March 2022.
The put option pocketed Froneman R96.38 million.
Despite Coronation stating that the PGM sector is a value trap amid the rise of electric vehicles, Froneman still believes that the cycle will turn in the next 6 to 12 months as interest rate cuts will increase demand for ICE vehicles.
Read: We underestimated how bad things really were in South Africa: CEO