MTN has reportedly come under fire from the Public Investment Corp (PIC) for giving its former CEO, Sifiso Dabengwa, a R23,7m golden handshake.
Dabengwa resigned suddenly in November after the group’s Nigerian operation was fined US$5,2bn for failing to disconnect more than 5m unregistered Sim cards.
Bloomberg reported on Tuesday that the PIC, which invests pension money on behalf of government employees, has described the payment to Dabengwa as “excessive”.
MTN revealed the payout in its 2015 annual report, which was published on Monday.
The money it paid its top executive management team, including Dabengwa, jumped to R165,6m in the 2015 financial year, an increase of 18,8% over the R139,4m it paid in 2014.
The increase was in large part due to three golden handshakes, TechCentral reported on Monday.
Apart from handing over more than R36m (including R23,7m in “compensation for loss of office”) to Dabengwa, two other former top executives were paid handsomely to leave.
Former MTN Nigeria CEO Michael Ikpoki, who was the executive most directly involved in and responsible for the Nigerian fine fiasco, received R26,9m, of which R17,3m was for compensation for loss of office (severance, leave and lifestyle benefits).
Ikpoki left MTN following the imposition of the $5,2bn fine (now reduced to $3,9bn, but still being negotiated).
Former group chief operations executive Zunaid Bulbulia received R19,7m, of which R13,3m was for compensation for loss of office (severance, restraint-of-trade and gratuity pay).
Cumulatively, the group paid Dabengwa, Ikpoki and Bulbulia R54,2m in severance pay.
Now the PIC, in reference to Dabengwa’s payout, has told Bloomberg that it has communicated with MTN management “its strong opposition to what we see as gross misuse of shareholder funds”.
“Management and the board of MTN should be held accountable for actions taken under their watch,” it told the news agency.
The PIC holds about 13% of MTN’s equity and is the telecommunications operator’s largest shareholder. — (c) 2016 NewsCentral Media