Table of Contents
Key Points:
- Pick ‘n Pay awards CEO Sean Summers four million shares, worth R108 million ($5.4 million), to revitalize the struggling retailer.
- Summers’s shares will vest in stages: 2025 for leadership implementation, and 2027 for succession planning and financial performance.
- Pick ‘n Pay announces a R4-billion ($216 million) rights issue, fully underwritten by Absa, RMB, and Standard Bank.
Pick ‘n Pay, one of South Africa’s leading supermarket chains, partly owned by the billionaire Ackerman family, has granted its CEO Sean Summers a substantial incentive in the form of shares to turn around the struggling retailer.
The company announced that it awarded him four million shares under its restricted share plan earlier this month. At the current price of R27 per share, these shares are valued at approximately R108 million ($5.4 million).
Performance conditions for share vesting
These shares are contingent upon specific performance conditions that are crucial to the revival of Pick ‘n Pay’s core supermarket business. While these conditions remain undisclosed, they will be detailed in the company’s next annual report. The shares will vest in three stages.
The first two million shares will vest on Oct. 31, 2025, based on the implementation of effective leadership and operational structures. An additional one million shares will vest on Feb. 28, 2027, contingent on CEO succession planning. The final 1 million shares will vest on Feb. 28, 2027, linked to financial performance targets.
Leadership reorganization and rights issue
Summers has a 32-month contract, and finding a successor is a top priority within this period. This criterion is not only a part of his performance shares but also a significant goal announced in the company’s recent results. The company aims to reorganize its leadership and establish clear succession plans with seasoned experts.
Summers’s modest compensation package reflects his commitment. He was paid R10 million ($540,000) in the five months following Pieter Boone’s departure. Unlike his predecessors, Summers receives no retirement, medical, or other benefits and is technically above the mandatory retirement age.
Despite being independently wealthy, Summers returned to Pick ‘n Pay at the Ackerman family’s request to turn the group around. It is yet to be seen if his compensation will remain at the same level in the coming year.
In addition to Summers’s incentives, Pick ‘n Pay has announced a R4-billion ($216 million) rights issue. The terms offer a 32 percent discount to the share price on July 10, though this was a narrower 5 percent discount when the initial plan was announced. The rights issue is fully underwritten by Absa, RMB, and Standard Bank.
If Pick ‘n Pay’s share price climbs back to its previous levels of R50 or R60, Summers’s shares could be worth closer to R200 million ($10.8 million), doubling his incentive to steer the retailer towards a successful turnaround.
Pick ‘n Pay, established in 1967, holds a significant position in Africa’s retail sector with a network exceeding 2,000 stores across eight African countries. As the nation’s second-largest retailer, it trails behind Shoprite Holdings, partly owned by South African billionaire Christo Wiese.
