Jurie Strydom, the new CEO of Old Mutual, could earn as much as R300 million under a new outperformance plan designed to “unlock significant and sustained shareholder value”.
The board admits that “since 2018, the company’s share price has not met expectations and continues to trade at a discount to group equity value.” This new incentive is “structured to align executive performance directly with the long-term interests of shareholders”.
Strydom, who joined as CEO earlier this year after Iain Williamson indicated his decision to retire, was previously CEO of Alexforbes Life, Regent Insurance, and Sanlam Life and Savings. He was also an executive director of Imperial Holdings.
To receive the maximum value of R300 million, Strydom needs to get the Old Mutual share price to R21.74 (or higher) by 12 May 2030, which is double the price of R10.87 from 12 May 2025, when he started in the role.
In structuring this, the group will acquire 13.8 million Old Mutual shares on the open market, to be held in escrow. On Friday, the group granted Strydom share appreciation rights on double the number of those forfeitable shares.
Old Mutual listed on the JSE in 2018 as part of the managed separation process from the previous incarnation of the group. The then Old Mutual plc was split into four underlying entities: Old Mutual, a minority shareholding in Nedbank, Quilter (the UK wealth business), and the Old Mutual Asset Management unit in the US (later renamed BrightSphere Investment Group).
There are a number of conditions attached to the award for the CEO.
First, there is a minimum five-year employment period for Strydom, so he has to stay in the role until May 2030. At that point, there is a two-year window during which the vested rights may be exercised in tranches (of no less than 25%). Once exercised, the vested shares are to be held by Strydom for a further two years.
Second, there are four performance hurdles for the plan:
- If the share price appreciates by less than 40%, no rights will vest;
- If appreciation is between 40% and 59.9% (R15.22 and R17.38), one-third, or 33%, of the rights will vest;
- If appreciation is between 60% and 79.9% (R17.39 and R19.56), two-thirds, or 67%, of the rights will vest; and
- Full vesting (100%) only occurs if the share price appreciates by 80% or more (in other words, over R19.57).
Any increase over the R21.74 price is capped, meaning the maximum Strydom can receive is R300 million.
Dividends that accrue over time will be reinvested into ‘dividend shares’, which are not subject to the R300 million cap. Additionally, there are various termination and change-of-control provisions until the end of the expiry of the holding periods.
Under this, Bloisi has to double the market cap of Prosus between 1 July 2024 and 30 June 2028, plus this needs to be maintained for at least a year. Separately, total shareholder returns in US dollars need to beat the 50th percentile of its peer group of 51 companies.
The group also increased Strydom’s minimum shareholding requirement from 200% to 300% of his total guaranteed remuneration.
Also on Friday, the group announced that Strydom had acquired R10 million worth of Old Mutual shares in his personal capacity. This equates to around 750 000 shares. Prior to this, according to the group’s annual report, he held under 23 000 shares. Strydom has five years to get to the 300% level. – www.moneyweb.co.za
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Jurie Strydom
