Shoprite | Proxy voting and recommendation
Shoprite Holdings (SHP) receives a corporate governance score of 2.39 out of 5 (FY '18: 2.17) and is rated as ‘adequate'. By comparison, industry peer Pick n Pay (PIK) has a corporate governance score of 2.73 out of 5 and is rated as ‘adequate'We commend the Board on succession planning since the departure of four of its long-standing members in FY '19. S Zinn replaces E Kieswetter as the Lead Independent Director (LID) of the Board given E Kieswetter's appointment as Head of SARS. The Board now consists of 44% black candidates (FY '18: 36%) and 33% female directors (FY '18: 11%).
We commend the Board on changes to the remuneration policy applicable from FY '20 which will roll-out over a three-year process. We believe that the implementation of the remuneration policy requires improvement. STI targets set for FY '19 were questionable considering that trading profit and shareholder value declined substantially whilst the STI awarded to executive management was almost flat y/y. We commend the Board on the introduction of a malus and clawback policy on executive incentives.
We believe shareholders should elect to replace C Wiese as chairman of SHP. We question the effectiveness of any LID to balance the SHP board given Wiese's stature and history within the Group.
SHP continues to improve practises for the betterment of the environment through reducing waste, electricity consumer and carbon emissions. The recent surge in xenophobic attacks on employees negatively affected SHP and other SA retailers operating in Africa.
We recommend voting ‘FOR' all resolutions except ordinary resolutions 3 and 11.2, for which we recommend voting ‘AGAINST'.
Shoprite Holdings Limited is an investment holding company. The Company is a food retailer and wholesaler. It operates in the Republic of South Africa (RSA). It operates through four segments: Supermarkets RSA, Supermarkets Non-RSA, Furniture and Other operating segments. The Supermarkets RSA segment includes retail operations under the Shoprite, Checkers, Checkers Hyper and Usave brands in South Africa, retailing products, such as food, clothing, general merchandise, cosmetics and liquor. The Supermarkets Non-RSA segment includes its retail operations under the Shoprite, Checkers, Checkers Hyper, Usave and certain Hungry Lion brands outside of South Africa. The Furniture segment includes its retail operations under the OK Furniture, OK Power Express and House & Home brands retailing products, such as furniture, household appliances and home entertainment systems. Other operating segments include trading in franchise operations, and retail and wholesale of pharmaceutical products.
Avior is a globally recognised capital markets research and trading firm, with the broadest research coverage within the region, with 100+ SA and 20+ SSA companies under coverage. Avior services clients from offices in London, Cape Town and Johannesburg.
Our research quality is consistently recognised in local and global surveys, with 18 analysts currently rated in their respective sectors (FM 2017). Value add through in-depth, innovative, high quality and consistent research with comprehensive underlying fundamental modelling supported by regular analyst and roadshow interactions.
Avior has proven that by working closely with our clients we can mutually develop dominant positions in certain sectors, going from strength to strength. Avior has a dedicated ESG team, having been ranked #1 in Corporate Governance research since 2008.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.