Execs on the move

Have you noticed how many top JSE-listed executives are on the move? From late May to mid-June there was a flurry of top-tier personnel changes, as though boards and executives wanted to get their lives rearranged before winter set in.

First up at the end of May was the news that KAP CEO Gary Chaplin was resigning at the end of October after 10 years at the helm of this former Steinhoff subsidiary. It hasn’t been a great 10 years for KAP or its shareholders; the share price moved from a high of R9.45 in March 2017 to a grim R2.06 currently. At least this represents a bit of an improvement on the R1.50 to which it plunged in April 2020.

Of course, during that time KAP had to contend with the fallout from the Steinhoff implosion, and then there was Covid. But it’s difficult to come up with excuses for the recent poor share price performance other than poor operating performance, which must largely rest with management. Days after the announcement of Chaplin’s unexpected departure came the news that KAP’s headline earnings per share for the year to end-June were expected to be down 30%.

And, while KAP shareholders have suffered, Chaplin did comparatively well, picking up a bonus most years. His replacement – the current CFO – doesn’t seem to have thrilled the market.

On the same day as Chaplin’s news came Mpact’s announcement that its long-reigning chair, Tony Phillips, was stepping down after 14 years. A dramatic move that had much to do with the years-long battle with Caxton. The new chair, Sbu Luthuli, put on an impressive performance at Mpact’s recent AGM.

Then in very early June came the announcement of the resignation “with immediate effect” of Sygnia’s company secretary, Leanne van Wyk. Those three words (with immediate effect) are always a little disconcerting, conjuring up suspicions of turmoil as they inevitably do. So Sygnia shareholders were presumably much relieved when the company issued a Sens correction a day or two later stating that Van Wyk is only leaving at the end of August.

CFO churn

Tsogo Sun has had a tough few years. Its share price collapsed when Covid hit but then quite quickly recovered. Sadly for shareholders, since the end of September it has crumbled from a high of R12.50 to R7.72 currently. The share price is now back at its May 2021 level. This weak performance may have been behind the rather curt announcement, in early June, that CFO Gregory Lunga had resigned “with immediate effect”.

This is the third consecutive CFO to resign from Tsogo Sun. Rob Huddy resigned with effect from July 2020 and was replaced by Annelize Hoyer, who resigned in July 2021 to be replaced by Lunga.

During all this CFO churn Chris du Toit has held onto his position as CEO. According to the Sens announcement, Du Toit, who’s been CEO since June 2019, will serve as CFO until a new appointment is made.

The dramatic changes to the Absa board – new CEO Kenny Fihla and chair René van Wyk – were met with surprisingly little public comment, perhaps reflecting the recent years of uncertainty around the group and the possibility the market is a little jaded with its seemingly endless woes. The only sign of a smidgen of unhappiness was the 11% of shareholders who voted against the re-election of Van Wyk at the June AGM.

Then came the early June announcement that Coronation CFO Mary-Anne Musekiwa had tendered her resignation, effective end-November, to “pursue an international career opportunity”.  Two weeks later came news that Musekiwa was stepping down as CFO at the end of June but would remain with Coronation for the duration of her notice period.

This must have been a blow to Coronation, which has recently pulled out all the stops to improve its BEE rating. Talk is that Musekiwa is headed to Bermuda, where Orbis has a substantial operation. Whatever the offer, it must have been extremely attractive to justify walking away from Coronation’s recent generous BEE share transaction.

Board changes

A few days later came a slightly different type of move. The Mr Price board announced that 80-year-old Stewart Cohen will retire at the AGM in August.

Cohen, who co-founded Mr Price with Laurie Chiappini in 1985, has been honorary chair for more than 15 years. As the gushing Sens announcement said, Cohen and his partner were instrumental in disrupting apparel retail in South Africa.

“First operating as factory shops, he and co-founder Laurie Chiappini focused on selling high quality merchandise at substantially lower prices, at a time when fashionable clothing was not affordable or accessible to the broader population.”

Their remarkable success over the decades coincided with the surge in China’s role as the factory of the world.

But, honorary chair? And to hold the position for so long? However good Cohen was, and there’s no doubt he was brilliant, there is a time for retirement and it should be sooner rather than later.

The danger is his very brilliance may overshadow the board and prevent it from moving into the next era; the next phase of disruption. It’s hard not to suspect Pick n Pay’s Raymond Ackerman, genius that he was, did a similar disservice to the company he built by holding on too long.

Meanwhile from TFG (The Foschini Group) came the truly astounding news that Michael Lewis, Ronnie Stein and Eddy Oblowitz will no longer be classified as independent. Lewis has been on the board since 1989, Stein since 1997 and Oblowitz since 2010. They are not moving off the board, they’re just being reclassified non-executive directors instead of independent non-executive directors.

It seems at least one of the large institutional shareholders (the Public Investment Corporation perhaps) has been pressuring the TFG board to update its governance, or at least its classification system. And eventually they did. So from now on, after 12 years directors will no longer be tagged independent.

Finally, towards the end of the month came news that Sun International’s new CEO, Ulrik Bengtsson, has been issued with a work permit after a wait of just three months. So, home affairs isn’t doing too badly after all. It takes much longer than that to get a visa to just visit Ireland these days.

_{Top image: Rawpixel / Currency collage.}