South Africa’s Biggest Fund Votes Against Mining Executives’ Pay

Public Investment Corp., the biggest South African investor, voted against the executive pay of the nation’s biggest gold and platinum mining companies because it failed to track performance and was high relative to peers.

State-run PIC, managing public workers’ pensions, rejected pay plans at Anglo American Platinum Ltd. (AMS), Gold Fields Ltd. (GFI), AngloGold Ashanti Ltd. (ANG), Sibanye Gold Ltd. and Royal Bafokeng Platinum Ltd., it said today in an e-mailed statement. PIC voted at their annual general meetings in April and May this year.

South African mining companies have been resisting demands from labor unions for above-inflation wage gains for underground workers, saying they are unaffordable. PIC said Gold Fields’ proposal to hold the pay of Mamphela Ramphele, chairman at the time, at 2.4 million rand ($235,000) meant it was “too high” at almost double the median figure of resource peers.

“The remuneration policy appears to be inconsistent with best practice,” said PIC, the biggest owner with 7.3 percent. “There are no clear defined group performance targets.”

Gold Fields, which spun off most of its domestic assets to create Sibanye this year, in 2012 paid Chief Executive Officer Nick Holland 45.3 million rand, up 38 percent, including 24.3 million rand of share payouts originally awarded in 2009.

Unions are demanding pay for entry-level underground gold workers of as much as 12,500 rand a month, from 5,000 rand now.

The Chamber of Mines, representing gold companies, has offered an inflation-matching increase of 5.5 percent to 5,275 rand a month excluding allowances and bonuses.

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PIC said Anglo American Platinum, the biggest producer of the metal, had “no clearly defined performance targets and sustainability measures.” It’s the biggest shareholder after Anglo American Plc, according to data compiled by Bloomberg.

Anglo American Platinum and Gold Fields didn’t immediately respond to requests for comment by phone and e-mail.

Royal Bafokeng also didn’t immediately reply to Bloomberg queries. Stewart Bailey, head of investor relations at AngloGold, wasn’t immediately able to comment.

“We’re a new company having been spun out of Gold Fields so our remuneration of non-executive directors is similar to that of Gold Fields,” James Wellsted, a spokesman for Sibanye, said today by phone. The company has “employed an external agency to help” realign pay, Wellsted said.

Gold Fields’ Ramphele, who quit in February, was paid 2.3 million rand in 2012, according to the company’s annual report.

To contact the reporter on this story: Kevin Crowley in Johannesburg at kcrowley1@bloomberg.net

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net

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