There’s something beautifully symmetrical about all those lovely zeroes and just the right amount of 1s. It’s almost poetic in its simplicity: R100,100,000. That’s how much one of the best — perhaps the best — CEOs of a food retailer in the country was paid for working for the 12 months to June 2016.
It’s possible that Shoprite’s Whitey Basson did an awful lot of overtime in that period. He may even have worked 24/7. He’s that sort, superhuman.
But you do begin to wonder. Does Basson hate his job at Shoprite so much that he needs the promise of that amount of dosh to lure him into the office every day? If that is the case then we can assume he won’t be there much longer. When you’ve lost your passion for a job and you have all the money you and your great, great grandchildren might ever need, eventually no amount of additional short-term incentives will persuade you that you should actually get up and go to work.
Why did they pay him so much? (You ask, rather naively.) Because they could. And there’s nothing on the horizon that is set to change the ability of remuneration committees to heap as much pointless generosity on their powerful bosses as their powerful bosses want.
The biggest insult is the tedious self-serving remuneration reports that invariably accompany these large sums. They’re designed to give the reader the impression that a lot of thought went into it; that if it wasn’t exactly a precise scientifically determined sum, then at the very least it was a sum that was determined by the vigorous workings of the free market.
The most important, if not the only, function these reports serve is to enable the fund managers to tick off those equally tedious corporate governance boxes. Once the boxes are ticked off, we’re assured, everything is okay. Everybody can report to everybody else along this trail that they’ve done their bit of King Code overseeing.
To show how seriously the Shoprite remuneration committee and shareholders (overpaid fund managers) take things, the annual report contains some of the shareholders’ feedback. Not all the responses to that feedback fall into the "take-a-hike" category, but most do.
Of course, if you’re not happy with what the remuneration committee says there are always the headhunters and remuneration consultants to add their tuppence worth. Actually, more like a couple of millions worth.
That’s what these "experts" are paid by, oh yes, the very same people on whose pay they are advising. What are the chances of them, or anyone else in this toxic chain of self-enrichment, saying: "Actually that does look a bit steep, let’s try to open up the game to more players and see what happens"?
Consultants quickly find out there’s not much return business in that line. Remuneration committee members will find that lucrative board appointments become scarce. Much more likely, as in the tale of the emperor’s clothes, they will say how remarkably talented the individual is and how there’s no-one else in the whole kingdom who could do his job as well.
Indeed, it’s very likely these committee members and consultants use every opportunity they can to remind their clients of just how remarkably valuable they are. So even if Basson thought R100,100,000 was pushing it a bit ("fat chance", I hear you say), he’d be promptly reminded that all the best people were doing it. And surely he was as good as the best. And perhaps he would also be told that he had better grab what he could while he could.
Executive remuneration is the only form of self-dealing that is still allowed, indeed actively encouraged, by listed companies. Imagine if every employee in this country had the opportunity to set his/her own pay.
How do we dare try to persuade our politicians not to grab what they can just because they can? We have the politicians our business leaders deserve.