Sibanye defends Neal Froneman, says $18.9-million salary is tied to reward

Sibanye-Stillwater, a South African mining company led by CEO Neal Froneman, has responded to a report revealing that Froneman received $18.9 million in compensation in 2021, as the company grapples with South African gold mine workers in a bid to end weeks of industrial action over wages.

According to James Wellsted, a spokesperson for Sibanye-Stillwater, the majority of Froneman’s remuneration in 2021 was linked to the group’s long-term incentive for executives. This represents the instruments granted to him during the year as part of rewards for meeting specific goals that resulted in increased shareholder value.

“The bulk of the additional remuneration was linked to stock price appreciation. We, as management, are incentivized on a variable basis through shares that are awarded periodically and then if certain profitability and other measures are met,” Wellsted said.

He added that from 2018 to 2021, the company’s share price increased from R11.44 ($0.724) to R72 ($4.56), and as a result, the mining group’s market capitalization increased from R13 billion ($823.1 million) to R180 billion ($11.4 billion), resulting in a significant gain for shareholders through the firm’s expansion and growth strategies implemented by Neal Froneman.

As a result, it became critical to reward the South African businessman and other executives, as the firm is unlikely to repeat this 560-percent share-price appreciation in the near future.

In 2021, Sibanye-Stillwater’s executive directors and prescribed officers, including Froneman, were handsomely rewarded, with R804.9 million ($51.1 million) in remuneration — 84 percent of which came from a special bonus as part of rewards for meeting specific goals that resulted in increased shareholder value.

Froneman received the lion’s share of this remuneration, taking home R300.3 million ($19 million) in salary for the fiscal year ending in 2021 — a staggering sum even when compared to his remuneration of R62.73 million ($3.98 million) in 2020.

In 2021, he received a base salary of R12.42 million ($788,730), a cash bonus of R7.8 million ($495,340), and conditional share profits worth an additional R264 million ($16.77 million).

Froneman has led the company to new heights since assuming the role of CEO in 2013, when it was formed from Gold Fields’ former South African gold mines.

With a market capitalization of R158 billion ($10 billion) under his leadership, the company ranks as one of the 20 most capitalized firms in Africa.