NED chairman’s fees not approved – what now?

A most interesting development at the Astral Foods Ltd (JSE:ARL) GM held on 19 April occurred, in follow-up to the AGM held on 8 February 2018.

At the AGM more than 25% of the shareholders voted against the remuneration of the non-executive chairman, Mr Theuns Eloff, and the board was forced to call a GM to again ask the shareholders to consider the matter.

The agenda of the GM consisted of a single special resolution, namely the approval of the proposed fees of the chairman.

In the end the holders of only 48% of the issued shares attended the meeting or voted by proxy,  and almost 47% of the votes were cast against the resolution.

At issue was a remuneration package of R1.1m which is not considered excessive.  However, Astral Foods now has a chairman who may not be remunerated like all other independent and non-executive directors of the issuer, as a special resolution is needed to do so.

Notwithstanding that Theuns Eloff is “viewed as an astute and well-informed director who adds value to Astral and reinforces the company’s no-frills operational culture”, he is now in an embarrassing position.

It is clear that the Astral board and management did not do their homework before the meeting.  Seems as if they simply assumed the outcome at the GM would be plain sailing, and did not bother to talk to their top 10 or 20 shareholders beforehand to ensure they would attend and support the motion.

Serious mistake.

Read the full article here.