South African billionaire Christo Wiese's Shoprite faces revolt over $7 million CEO pay

Shoprite Holdings Ltd., the South African grocer in which billionaire Christo Wiese holds the biggest block of votes, faces a shareholder revolt over executive pay ahead of its first annual meeting at which investors can block remuneration plans.

Several large US and European pension funds have said they will vote against Shoprite's pay proposals at the Nov. 6 meeting. They include the Florida State Board of Administration, the California Public Employees' Retirement System, the California State Teachers' Retirement System, the New York City Comptroller's pension funds, British Columbia Investment Management Corp. and Norway's KLP. Together they oversee almost $2 trillion in assets, though their stakes in Shoprite are small.

Proxy advisers Institutional Shareholder Services and Glass Lewis have urged investors to reject a new one-off long-term incentive plan for Chief Executive Officer Pieter Engelbrecht. ISS also recommends voting against the company's remuneration implementation report, after the board's remuneration committee used its discretion to pay out a short-term bonus measure in full even though performance fell below the threshold. ISS raised concerns about "the repeated use of exceptional remuneration arrangements."

A R117.8 million year

Engelbrecht's total earned pay rose 35% to R117.8 million ($7.1 million) in the year to June, from R87 million a year earlier, according to Shoprite's annual remuneration report. The biggest single item was R36.4 million ($2.2 million) from an executive super stretch incentive, a three-year award granted in October 2023 that paid out in full after the company hit a target set that year. It is being settled in instalments from October 2026 to 2028. Chief Financial Officer Anton de Bruyn's award under the same scheme was valued at R14.2 million ($855,000).

The rest of Engelbrecht's package included guaranteed pay of R22 million, a short-term incentive of R21.3 million after he achieved 108.3% of his operational targets, and R18.2 million from vested shares under the executive share plan.

This is the first annual meeting season since changes to South Africa's Companies Act made shareholder votes on pay binding. Until now, the votes were advisory, and a result below 75% only obliged a company to engage with dissenting investors. Shoprite's implementation report won 95.61% support last year, after drawing 74.3% in 2024.

Wiese backs the board

Wiese, who has sat on Shoprite's board for 35 years and serves on its remuneration committee, defended the decision. "This isn't something that was just decided in two seconds," he said in an interview, describing the committee's independent directors and advisers as "extremely good."

He compared Engelbrecht to Whitey Basson, who ran Shoprite as chief executive for almost four decades, and said he would "happily pay a billion rand" for executives of that calibre. "If that applied in the case of Whitey Basson, it applies as much to Pieter Engelbrecht," Wiese said.

Shoprite declined to comment beyond its remuneration report and its notice of the annual meeting.

The company's results give the board some cover. Shoprite raised its dividend and its earnings per share, excluding one-off items, by about 12% each in the year to June, and its shares have gained 26% this year. Engelbrecht has run the retailer since 2017, when he succeeded Basson.

Wiese's voting power gives the board a large cushion. He owns about 10% of Shoprite's ordinary shares, mostly through his Titan group, and his Thibault Square Financial Services holds 305.6 million deferred shares that carry votes but little economic value. Together they give him control of about 41% of the voting rights, according to ISS. Shoprite tried to buy back the deferred shares to simplify its ownership but dropped the plan after investors pushed back.

The structure has shielded Wiese before. In 2019 he used it to keep his seat as chairman even though holders of more than 60% of the ordinary shares voted against him. He handed the chair to Wendy Lucas-Bull in November 2020 and remains a non-executive director.

A lawyer by training, Wiese built Shoprite from a small chain of eight stores he bought into with Basson in 1979 into Africa's largest grocery retailer. He also controls stakes in investment group Brait and industrial supplier Invicta Holdings. Forbes estimates his net worth at $1.8 billion.

Figures were converted at R16.6 to the dollar.