South African billionaire Christo Wiese pushes through $10.2 million Shoprite CEO incentive despite pension fund revolt

South African billionaire Christo Wiese has used his outsized voting power at Shoprite to push through a new incentive plan worth about $10.2 million for Chief Executive Pieter Engelbrecht, overriding a revolt by some of the world’s largest pension funds.

Shareholders approved the retailer’s remuneration policy at its annual meeting on Friday, with 70.91% voting in favor and 29.09% against, BusinessTech reported, citing Bloomberg. The policy introduces a six-year long-term incentive for Engelbrecht carrying shares with a nominal value of about R170 million ($10.2 million).

The headline figure hides a much closer contest. Among ordinary shareholders, only 53.81% backed the policy, while 46.19% voted against it. The holders of Shoprite’s deferred shares, however, supported it unanimously.

Those shares made the difference. Wiese, the former chairman who has sat on Shoprite’s board for 35 years, controls the deferred shares through Thibault Square Financial Services. They carry votes but little economic value, and together with his roughly 10% stake in ordinary shares, they give him about 41% of the voting rights.

Wiese, who sits on the board’s remuneration committee, defended the plan. The policy “isn’t something that was just decided in two seconds,” he said.

Opposition had been building for weeks. Proxy advisers Institutional Shareholder Services and Glass Lewis urged investors to reject the plan, citing the repeated use of exceptional awards on top of Shoprite’s existing incentive programs. ISS also questioned a special modifier that triggered a short-term bonus even though performance fell below the target threshold.

Several large US and Canadian investors followed that advice, including the California Public Employees’ Retirement System, the California State Teachers’ Retirement System, the Florida Retirement System and British Columbia Investment Management.

Billionaires.Africa reported last week that Engelbrecht’s total earned pay rose 35% to R117.8 million ($7.1 million) in the year to June. That included a one-off “super stretch” award of R36.4 million ($2.2 million), guaranteed pay of R22 million ($1.3 million) and a short-term bonus of R21.3 million ($1.3 million).

The board argues that it needs continuity. Under the new plan, Engelbrecht qualifies only if he stays in the role for the full six years, followed by a two-year holding period. Shoprite is expanding into financial services and pharmacy, pursuing acquisitions and replacing its core IT systems.

“Instability at the leadership level has not been good for shareholders,” Chairperson Wendy Lucas-Bull said, according to Cape Town Etc.

The vote was the first under South Africa’s amended Companies Act, which makes shareholder votes on pay policy binding. Previously, a result below 75% only required a company to engage with dissenting investors.

Meanwhile, investors have little to complain about on returns. Shoprite’s revenue rose about 7.1% to R274 billion ($16.5 billion) in the year to June 28, and its shares are up about 26% this year. Billionaires.Africa reported on Monday that the retailer agreed a banking alliance with Investec to launch a Shoprite debit card, and it named Tasneem Abdool-Samad to its board last week.

Wiese is worth about $1.8 billion, according to Forbes.

As a result, the vote shows that Wiese remains the decisive voice at the retailer he built, even as outside investors push back.