Shoprite Holdings faces significant investor opposition to a new long-term incentive plan for CEO Pieter Engelbrecht ahead of its annual general meeting on November 6. [1] Proxy advisory firms Institutional Shareholder Services (ISS) and Glass Lewis have recommended that shareholders vote against the proposal, a position echoed by several large North American pension funds. [2, 3, 5]
Opponents cite the “repeated use of exceptional awards” on top of existing incentive schemes. [4] ISS said Shoprite had not provided a compelling rationale for the new plan. [2] Engelbrecht’s total earned remuneration rose 35% to R117.8 million in the last financial year. [7]
The vote will test new South African corporate governance rules that make shareholder votes on executive pay binding. [3, 4] Shoprite’s performance has been strong, and the outcome will be watched as a gauge of shareholder influence over corporate pay practices. [1]