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Neal Froneman, a South African businessman and mining mogul, has defended his $18.9-million compensation after a flurry of media reports and expert comments suggesting that Sibanye-Stillwater should have allocated a portion of the remuneration to settle a wage dispute with its South African gold mine workers.
Froneman, 62, the CEO of Sibanye-Stillwater who was appointed as an executive director on Feb. 24, 2020, received $18.9 million in compensation in 2021, prompting a series of comments as a wage dispute with workers resulted in a $246.9-million loss in gold sales in three months for Sibanye-Stillwater.
In an interview, Froneman stated that executive remuneration ‘is not well understood because his salary, bonuses, and even long-term incentives are benchmarked against what peers are paid.”
“I had nothing to do with my remuneration,” he said, adding that only about R28 million ($1.7 million) of his pay is in cash, while the remaining R270 million ($16.6 million) in shares is a cost to the shareholder.
“This is not unequal compensation. It is also an incentive that is under threat. We would not have received this if we had not performed well. It is not a risk-free investment. There is a significant difference,” he said.
“If you have not delivered, and you receive remuneration like this, then you should be embarrassed – but to be honest, the Sibanye team has shot the lights out. Our gold division only had five years of life. We have still got 10 to 13 years of life. We have saved 30,000 jobs,” he added.
In his defense, Piet Mouton, the CEO of PSG and a fellow South African businessman, recently suggested that the requirement to disclose executive pay should be made optional.
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.
According to James Wellsted, a spokesperson for Sibanye-Stillwater, the majority of Froneman’s remuneration in 2021 is linked to the company’s long-term incentive for executives. This represents the instruments that he received during the year as part of rewards for meeting specific goals that resulted in increased shareholder value.
“The majority of the additional compensation was tied to stock price appreciation. As management, we are incentivized on a variable basis through shares that are awarded on a regular basis and then if certain profitability and other measures are met,” Wellsted said.
