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MTN top execs cash in

Paula Gilbert
By Paula Gilbert, ITWeb telecoms editor.
Johannesburg, 30 Mar 2017
MTN group executive chairman Phuthuma Nhleko.
MTN group executive chairman Phuthuma Nhleko.

Despite MTN's previous financial year being "the most challenging year in the company's 22-year history", the telco's top execs still cashed in, in terms of salaries and other benefits, including a R72.2 million payday for executive chairman Phuthuma Nhleko.

This as the telecoms giant reported a full-year headline loss per share of 77c for the financial year ended 31 December 2016. This was compared to headline earnings per share of 746c a year ago and despite the group growing overall subscribers by over 3% to 240.4 million in 2016.

MTN's leadership during the challenging year was a unique situation, with no group CEO in place and Nhleko acting as executive chairman for the year and earning a salary of R30 million to do it. That, together with bonuses worth R38.2 million and director's fees worth almost R4 million, means he walked away from 2016 R72.2 million richer.

In comparison, Vodacom group CEO Shameel Joosub was paid almost R21.8 million for the year ended 31 March 2016 - including almost R14 million in short-term incentives and a salary of R7.8 million. This was, however, double his R10.9 million remuneration package the previous year.

Meanwhile, Telkom CEO Sipho Maseko walked away with R14.5 million for the year ended 31 March 2016. Maseko's total included a guaranteed salary package of almost R7.5 million, as well as R6.1 million in short-term incentives and almost R942 000 in "fringe and other benefits". He made over R2.2 million more than his total of over R12.3 million the previous year.

Nhleko's non-executive director remuneration in 2016 of almost R4 million was a 14% increase on the R3.5 million he took home in 2015. He also earned R5 million for less than two months in the role of group executive chairman when he stepped in to take over from exiting former group CEO Sifiso Dabengwa in November 2015.

Despite ending his role with MTN in 2015, Dabengwa still received R19.6 million in the 2016 financial year in "other benefits". When he resigned, he was given R23.6 million for "compensation for loss of office" and walked away with a total of R40.6 million in 2015.

His exit came just two weeks after MTN revealed it was facing a $5.2 billion (R71 billion at the time) fine in Nigeria for failing to disconnect 5.1 million subscribers in the country, by a regulatory deadline. In June 2016, MTN agreed to pay $1.671 billion (R25 billion at the time) to the federal government of Nigeria, over three years, after months of negotiations.

New MTN group CEO and president Rob Shuter officially took over as MTN's leader on 13 March 2017 and Nhleko has moved back to his role of non-executive chairman. Nhleko says he will stay in this role until no later than December 2018, when he plans to step down.

The 15 non-executive directors on the board took home a combined R24.2 million and executive directors a total of R97.9 million last year. The executive directors' total includes R68.2 million for Nhleko's salary and bonuses, Dabengwa's portion, and a total of R10.15 million for former MTN group CFO Brett Goschen, who left the company in September last year.

Spreading the wealth

MTN's other top execs also didn't do too badly in terms of remuneration packages. The top earner was Ismail Jaroudi, VP for Middle East and North Africa, who took home a total of almost R18.9 million, including an R11 million salary. He had been CEO of MTN Syria since 2006 and was appointed VP for MENA in December 2015.

Group chief legal counsel Michael Fleischer's total package was R17.3 million. Just over R6 million of this was his salary and his "other benefits" include a long-term retention amount of R10 million, of which a portion is forfeitable. His salary has gone up 20.7% compared to last year when he earned just over R5 million.

Newly appointed Stephen van Coller, who joined as group VP of strategy and mergers and acquisitions in October 2016, walked home with a whopping R15 million - this includes a salary of R1.8 million, and R13 million paid "in lieu of forfeited benefits from previous employer", the Barclays Africa Group.

Meanwhile, VP for West and Central Africa Karl Toriola took home a total of R13.5 million in 2016 after being appointed in December 2015.

Former MTN SA CEO Mteto Nyati - who left the telco this month - took home a total remuneration package of R7.9 million, which was a slight drop on his total package of R8 million last year. This despite his salary going up 8% from R3.6 million in 2015 to almost R3.9 million in 2016.

MTN Nigeria CEO Ferdi Moolman took home a total of R10.1 million last year after taking up his role in December 2015 amidst the Nigerian fine scandal. Former group COO Jyoti Desai, who retired in January 2017, took home a total of R14 million, a 5.7% increase on her total of R13.3 million last year.

Ten "prescribed officers", including those listed above, took home a total of R107.3 million in 2016 but only Jaroudi and Toriola received bonuses in 2016 of R6.4 million and almost R2 million respectively.

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