Hulamin: Loss-making Aluminium semi-fabricator awards top executives R3.2 million worth performance share incentives

Hulamin, the Pietermaritzburg-South Africa based Aluminium semi- fabricator has awarded just over R3.2 million worth performance share incentives to its CEO, Company Secretary and a Director of one of its subsidiaries.

The drive came in a situation when the small-cap posted a wider annual loss of R1.4 billion in June’20 and staff lay-offs in 2019.

Richard Jacob, Hulamin’s long-time CEO has been awarded 932,150 “performance shares” worth just over R2.1 million.

Willem Fitchat, Company Secretary has been awarded 195,727 shares worth R446,805, while Marlene Janneker – a Director of Hulamin Operations Proprietary Limited has been awarded shares worth R766,630.

All three award recipient has been engaged with the company since the 1990s when it was part of the Tongaat Hulett Group. Hulamin was unbundled from Tongaat Hulett in 2007 and its share price traded at around R40 when it listed on the JSE separately. In 2010, Richard Jacob was appointed as CEO.

Jacob, Fitchat and Janneker have accepted the performance shares; however, the shares will only vest in August 2023. These shares have been valued at R2.28 per share, more than twice the current trading price of the company’s shares.

The Group conveyed the message that: “Shareholders are advised that Hulamin has made awards of shares linked to the performance of the company [“Performance Shares”] in terms of its Equity-Settled Conditional Share Plan. The Performance Shares will be settled in a ratio of 1:1 with Hulamin ordinary shares on vesting.”

“The awards are deemed values based on a 30-day volume-weighted average price of a Hulamin share of R2.2828 as at 31^st December 2019 calculated in terms of the guidelines of the Share Plan… The transactions took place off-market and the requisite clearances have been obtained,” Hulamin added.

Performance shares awarded to the three top executives of Hulamin have raised strong concerns by shareholder activist Chris Logan of Opportune Investments, and Cy Jacobs of 36ONE Asset Management.

Logan even went to say: “Performance… What performance? It’s a total anomaly for me.”

He also pointed out: “When Hulamin listed in 2007, its share price was around R40 a share… I believe the company had a market cap of around R8.6 billion back then. While there have been further rights issues, the company’s share price is trading around the R1 mark today. Its market cap has plunged to around R345 million currently.”

Meanwhile, Cy Jacobs revealed over social media: “More performance compensation for execs when they have delivered nothing but tears for shareholders. Heavy management cost structures will erode all equity soon unless changes are made quickly. Total board compensation was 24.7m for 2019, that’s 7% p.a of market cap.”

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