Is this the weakest remuneration policy & report ever?

Trencor (JSE:TRE) shareholders will once again be asked to consider the company’s executive remuneration policy and implementation report at the upcoming AGM on 25 June 2019.

In compiling our voting paper which is available on our website, we also consider the details contained in Trencor’s integrated report. We believe this is the weakest attempt we’ve ever seen in providing shareholders with the required information. It spans all of 3 pages and lacks any information relating to the KPIs defined to measure executive performance.

It also does not deal with any objective standards used to determine actual performance by these executives. Only short term cash benefits are briefly outlined, which are never in the best interests of shareholders. Longterm share-based benefits accruing to executives do not form part of the board’s focus, which would offer an alignment with shareholders’ interests.

The board in our view has not been open, transparent and direct with shareholders.

What is particularly surprising is the fact that more than 36% of the holders of Trencor shares in 2018 voted against the remuneration policy resolution. Management then tried to engage with dissenting shareholders, with limited success.

This year’s report does not show any improvement from last year as regards disclosure.

Perhaps it is time that shareholders send a strong signal by voting against the appointment of the directors who serve on the Remuneration Committee.