Pick n Pay, which has begun a three-year turnaround under CEO Sean Summers, paid former boss Pieter Boone a sizeable cash “termination settlement” in terms of his contract of employment, stated MoneyWeb. Summers replaced Boone effective 30 September 2023.
According to the group’s financial statements, Boone was paid what it terms a “gratuity” of R15.776 million last year. This was over and above his total fixed remuneration of R9.5 million for the seven months between March (technically 27 February) and end-September. Boone’s base salary for the period was R7.9 million.
Boone stepped down in what the group couched as a mutual decision on 30 September (a Saturday). The group announced this, and the fact that Summers would replace him with “immediate effect” on the Monday morning (2 October).
Sales growth was an anaemic 0.3% in the first half, with internal price movement of a huge 8.3% (and Stats SA’s food inflation of 11.4%). This showed just how steeply volumes were falling.
The drop has stayed constant since the first half, with the group reporting growth of 0.3% in the PnP business for the 52 weeks to 25 February 2024. This saw the unit report a trading loss of R1.5 billion (a negative trading margin of 2.1%).
It says PnP’s total sales in the first 12 weeks of this financial year (March to May) “declined slightly” due to store closures, however, there was growth on a like-for-like basis.
The Ackerman family has committed to following its rights in the issue of shares, which will cost it roughly R1 billion. Both steps of this plan ought to be complete by the end of the year.
Boone’s tally
Boone’s R25.3 million remuneration for the last financial year – including the separation payment – was broadly in line with the previous year. In 2023, he received total pay of R24.7 million. This comprised fixed pay of R14.9 million and a short-term performance bonus of R9.8 million.
From his appointment on 20 April 2021, Boone was paid a total of R75 million (in fixed remuneration and bonuses):
- 2022 – R2.45 million (prescribed officer until his appointment)
- 2022 – R22.97 million
- 2023 – R24.69 million
- 2024 – R25.31 million
At the start of last year, Boone had 678 500 ordinary shares in the group as part of its long-term incentive scheme (restricted share plan).
These were forfeited upon his departure from the group.
Summers’s deal
Interestingly, Summers was paid a base salary of R10 million from 30 September, effectively R2 million a month.
According to the group’s remuneration disclosure, he receives no retirement and medical contributions or fringe/other benefits. He also received no short-term performance bonus or long-term share awards.
He will run the group for three years and is incentivised to ensure a succession plan is in place.
Outgoing chair Gareth Ackerman said last week that “Pick n Pay needs a vibrant management team in place to continue the turnaround in 2027, and one of Sean’s key KPIs is succession”.
By MoneyWeb
