Clicks | Proxy voting recommendation

Clicks (CLS) receives a corporate governance score of 3.03 out of 5 and is rated as “good” (FY '18: 3.38). By comparison, industry peer DCP scored 2.71 in FY '19. Clicks (CLS) receives a residual risk ESG score of 2.4 out of 5 (FY '18: 2.4). By comparison, industry peer Dis-chem scored 2.6 in FY '19.

Changes to the Board include the retirement of D Kneale and the co-ordinated appointment of V Ramsunder as his successor. Ramsunder was the COO of CLS from 2015. Executive Board representation remains 33% y/y. The Board consists of 11% independent directors per Avior given that five out of six non-executive directors have a tenure on the Board extending over more than ten years. We classify D Nurek as non-independent due to his long tenure and his financial interests. We recommend that CLS should implement a clear and immediate succession plan regarding the appointment of more independent non-executive directors.

The remuneration policy remains mostly unchanged in FY '19. Remuneration paid to executives is split between base and variable amounts. Variable pay formed 79% (FY '18: 85%) of the salary paid to the CEO of CLS in FY ‘19. STI is based on RONA and operating profit targets, whereas LTI is based on TSR and diluted HEPS benchmarks. The STI and LTI measures only partly align shareholder and executive interests, as they are cash settled and executives do not require a minimum share ownership.

We note CLS continues to be a Level 6 B-BBEE contributor in FY '19 y/y with opportunity for improvement. CLS has been included in the FTSE4 Good Index and the FTSE Russell/JSE Responsible Investment Index again in FY '19. CLS is in the ‘A-‘ performance band per the Carbon Disclosure Project.

We recommend voting ‘FOR' ordinary resolutions 1,2,3,4,5,6 and 7. We recommend voting ‘FOR' special resolutions 1,2,3,4 and 5.