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- Some Sasol shareholders expressed concern about the company’s remuneration policy and voted against it at the General Shareholders’ Meeting.
- The chairman of the board, Sipho Nkosi, describes the vote against the policy as a “moment of great regret.”
- Sasol has battled several headwinds in the last financial year, including the impact of oil price volatility and severe weather patterns in the US.
Sasol shareholders voted against the company’s compensation policy during an Annual General Meeting (AGM) on Friday, in which executives faced intense scrutiny over their pay model, given the company’s fragile financial performance.
The company’s remuneration policy had been criticized by interested stakeholders.
The nonprofit shareholder activism organization Just Share had previously indicated that it would oppose the compensation policy on the grounds that it does not incentivize top executives to urgently address the impending crisis posed by climate change.
“We accept the message you have conveyed to us by the way you voted on the remuneration policy implementation report and some of our other resolutions,” said President Sipho Nkosi.
“We got the message,” he added.
Nkosi said the company will consult with shareholders on the matter and described the vote as a “moment of great regret.”
The company announced Wednesday that it made the decision to cut directors’ fees by 20%, in light of “the erosion of shareholder value over the past two years,” which has affected its financial position.
“This fee sacrifice will remain in effect until shareholders consider a revised fee proposal at Sasol’s AGM 2021,” the company said.
Sasol has battled several headwinds in the last financial year, including the impact of oil price volatility, severe weather patterns in the US that shut down parts of its Louisiana chemicals project, and the impact of the Covid-19 blocking.
Nkosi said the immediate priority to the challenges facing the company was a cash conservation campaign to shore up the balance sheet and that they were repositioning the business to be resilient even if the price of oil reached $ 45.
“The board is well aware that the past year has been a challenge for our shareholders. Since the last annual general meeting a year ago, the share price has dropped about 60% and we suspended the dividend as part of the conservation of cash in progress “. he said.
“We recognize that our share price has been highly volatile and underperformed our peers,” Nkosi said, adding that the volatility could, in part, have been driven by the impact of the hurricanes and storms in Louisiana. and the possible rights issue that will be launched in February 2021.
The petrochemical giant’s weak financial position led it to sell 50% of the base chemicals unit in Lake Charles to LyondellBasell for $ 2 billion.
CEO Fleetwood Grobler said the remaining 50% of the basic chemical exposure at the LCCP positions Sasol to participate in the recovery of raw materials for years to come.
Former Sasol CEO David Constable, who spearheaded the investment in the US chemicals project, now runs Fluor Corporation, a contractor involved in the development.
Sasol CEO Vuyo Kahla dismissed a concern raised by a shareholder about Constable’s new role in the project, given his history at its inception during his time at Sasol.
Kahla stated that Constable has not been part of Sasol since June 2016.
