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MTN directors to score shares

Nicola Mawson
By Nicola Mawson, Contributor.
Johannesburg, 23 Dec 2014
CEO and president Sifiso Dabengwa could reap shares currently worth R18.6 million.
CEO and president Sifiso Dabengwa could reap shares currently worth R18.6 million.

MTN, Africa's largest cellular company, has awarded eleven of its directors thousands of shares that will earn them millions if certain performance targets are met.

According to a disclosure made to the JSE, 11 directors have been awarded shares worth a total of R86.4 million, which vest three years from 19 December. Among these are CEO and president Sifiso Dabengwa, who has been awarded 83 100 shares; its biggest potential payout with a worth of R18.6 million.

However, MTN, along with other mobile operators, has not been faring all that well lately as its top line continues to come under pressure from increased competition in the sector and dwindling voice revenue. Income from voice is being replaced by that from data, but this is at lower margins.

In the six months to June, its latest results, group revenue gained 10.7%, to R72.7 billion, but this was supported by the continued weakness of the South African rand. Revenue from its local operation declined by 7%, to R19.1 billion.

"This was mainly the result of lower outgoing voice revenue, which declined by 8.6% to R8.4 billion. Incoming voice revenue declined by 30.4% as the impact of the mobile termination rates (MTR) reduction took effect during the second quarter," the company said in a statement.

Group earnings before interest, taxation, depreciation and amortisation (EBITDA) increased by 19.6%, to R33.6 billion, excluding the profit from the sale of towers, says MTN. Basic headline earnings per share increased by 9%, to 729c, and attributable earnings per share rose by 4.4%, to 731c.

Other executives who are set to earn if the company hits its targets includes CFO Brett Goschen, who has been awarded 54 700 shares with a current value of R12.3 million. Paul Norman, group chief human resources and corporate affairs officer, has been awarded shares that are currently worth R6 million.

Group chief strategy officer Karel Pienaar is also set to benefit if MTN hits its targets, as he has been awarded stock currently worth R6.5 million.

Michael Fleischer, appointed head of legal and regulatory affairs earlier this year, is set to earn at least R6.8 million in three years' time as he has been awarded stock currently worth that much. MTN's shares have been steadily gaining.

Group CIO Jyoti Desai has been allocated shares worth R9.7 million.

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