Johannesburg – The Industrial Development Corporation (IDC) on Friday slammed energy and chemicals group Sasol for paying exorbitant separation packages to it joint chief executives and presidents.
The IDC – as one of the company’s largest institutional shareholders, with an 8’5% stake – was exploring its options on how to tackle these golden handshakes.
The petrochemical giant last week revealed that it paid Bongani Nqwababa and Stephen Cornell about R96-million in benefits and golden mutual separation packages.
This as the company’s debt profile remains at risk due to cost and project overruns at the Lake Charles Project in the US, which have gone up to almost $13billion (R215.6billion) from the original $8.9billion estimate.
Sasol grappled with debt of R190billion during the year to the end of June, underlying the urgent need to sell non-core assets and do a rights issue to raise funds. During this time, the company suspended its dividends to protect its liquidity.
Divisional executive for strategy and corporate affairs at IDC, David Jarvis, said the investor was outraged with the way Sasol’s board had failed adequately to consult shareholders on Nqwababa and Cornell’s separation packages.
He said shareholders were advised they would be informed about the matter at year-end after they raised questions during the company’s annual general meeting in November last year.
“The generous mutual separation packages, amounting to an additional R36m above their approved remuneration packages, do not align to Sasol’s operating and financial performance during their tenure,” Jarvis said.
“Taking into consideration the performance of the company, we wish to express our disapproval regarding the quantum of the separation packages. IDC is currently exploring its options in this regard.”
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