Major shareholder flays ‘excessive’ payouts to MTN ex-chief executives

Africa’s largest money manager and the biggest shareholder in MTN, Public Investment Corporation (PIC) of South Africa, has described as “excessive” the payment made to the telecommunications firm’s former Group Chief Executive Officer (CEO), Sifiso Dabengwa and the CEO of the Nigerian arm, Michael Ikpoki, who resigned their appointments after a record $5.2 billion fine imposed by the Nigerian Communications Commission (NCC).

While Dabengwa quit on November 11, 2015 having worked with the company since joining it in October 2001, Ikpoki and the Nigerian Corporate Services Executive, Akinwale Goodluck, stepped down in December.

PIC, in a message to MTN, opposed the fine, describing it gross misuse of shareholders’ funds.

According to Bloomberg, MTN in its yearly report published on Monday gave Dabengwa R23.7 million payout, which is equated to almost three years his basic salary which took his total 2015 remuneration to R40.6 million.

Ikpoki, on the other hand, was awarded R17.3 million in compensation.

MTN’s share price has declined by 25 per cent since imposition of the fine, which was later reduced to $3.9 billion and was made public in October.

The PIC, which manages the bulk of the government’s pension fund money in South Africa, is MTN’s biggest shareholder with a 13 per cent stake in the company, according to data compiled by Bloomberg. It has almost R2 trillion in assets under management.

The Executive Chairman, Phuthuma Nhleko, a former CEO of the company, who returned to resolve the Nigerian crisis, was paid R5 million for work from November 9 until the end of the year. His contract runs until May 9, indicating a total payout of R17.5 million for six months’ work. He may also be due a bonus when his contract expires, according to the annual report. The company expects to name a new CEO by the end of June.

The telecoms firm is yet to settle the fine, despite hiring former U.S. Attorney General, Eric Holder, to represent the company and making a N50 billion ($251 million) down payment.