Shareholders in Absa Group overwhelmingly slammed the group’s implementation of its remuneration of executives with an astonishing 43.37% of those who voted saying they would not endorse it.
While non-binding and a so-called advisory vote, this has to be seen as a serious indictment of the group’s remuneration committee (RemCo).
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Although reported elsewhere – erroneously – as a vote on non-executive remuneration, this was strictly related to the implementation of its pay policy.
The vote this year stands in stark contrast to last year where a full 89.54% voted in favour.
This is not a revolt among retail shareholders …
To achieve a result where 43% of those at the AGM voted against a resolution would need most of its top 10 shareholders – who held 53% of the bank’s shares at the end of December – to vote against it.
Given its substantial stake, the Public Investment Corporation (PIC) with 13.82% as at the end of 2025, would’ve surely voted against the resolution. There is no way the maths would’ve worked had it not.
The next largest shareholder, Newshelf 1405 (Pty) Ltd, is its BEE special purpose vehicle, and that would’ve obviously not voted against it.
2025 key year for Absa’s improvement
Bizarrely, Rose Keanly, the chair of its RemCo, wrote in its 2025 annual report that “2025 has been a ‘key’ year for Absa with a sustained improvement in performance, as well as the appointment of a new Group CEO and investment in top leadership in the context of a revised pan-African strategy and operating model”.
Even the tenures of the short-lived Daniel Mminele and (very) early ‘retirement’ of former CEO Arrie Rautenbach failed to raise this much opposition.
Those who would’ve voted against could include the PIC, M&G Investments, Blackrock, Vanguard, Old Mutual, Sanlam, Truffle, Laurium and 36One.
Rationale
The RemCo says that “a primary focus of the RemCo, together with the Group CEO, has been to ensure that the remuneration structures for senior executives are appropriate to attract, reward and retain the right calibre of top executive talent, and that the composition of the total remuneration mix potential is appropriately weighted to performance-based remuneration over the short, medium and long term, aligned with the creation of sustained shareholder value over time.
“This has resulted in a highly focused and targeted rebase in senior executive total remuneration opportunity for certain roles, aligned with the shift to pan-African accountability, by reference to market practice in peer organisations,” it adds.
“The upfront investment in high-calibre executive leadership (including in the case of external appointments, the need to buy out forfeited awards as part of the recruitment process), and the targeted rebase of total remuneration potential for certain roles, comes with a commitment to the Board for improved performance over the medium term, and will be self-funded by the Group through productivity and cost-efficiency gains.”
CEO’s payday
In 2025, CEO Kenny Fihla received total remuneration of R148 million from Absa.
The bulk of this comprised the R98.5 million in buyout rewards he was awarded upon joining the bank from Standard Bank. Fihla’s remuneration had a total fixed amount of R6.285 million.
In addition, he received a short-term cash award of R12.15 million and a share award of R11.15 million.
The group says that “as result of there being more than 25% of the votes exercised against the non-binding advisory vote number 2, shareholders will be invited to raise their concerns or recommendations on the remuneration implementation report”.
“Further details will be announced on Stock Exchange News Service of the JSE Limited in due course.”
These engagements have tended not to yield any meaningful results, however the new Companies Act provides for another world entirely.
This article was republished from Moneyweb. Read the original here.
