Home News Kumba chief executive receives R42.24m pay package for 2019

Kumba chief executive receives R42.24m pay package for 2019


The company paid its executive directors and prescribed officers R128.95million in 2019.

JOHANNESBURG – Kumba Iron Ore, which is valued at R110billion, paid its executive directors and prescribed officers R128.95million in 2019, the company said in its annual report released on Friday.

The company, which sells iron ore to ArcelorMittal South Africa and to countries including China and Japan, said that Kumba’s chief executive, Themba Mkhwanazi, had received a total pay package of R42.24m in 2019.

Mkhwanazi’s pay package included R8.54m in total guaranteed pay and a R5.3m short-term incentive cash bonus, which was paid last month.

Chief financial officer Bothwell Mazarura received total pay of R15.21m, including a total guaranteed pay of R4.69m and a R1.7m short-term incentive cash bonus. The company said its 12217 employees received R5bn in salaries, benefits and share-based payments during 2019 compared with R4.6bn in 2018.

In 2018, Kumba, a subsidiary of Anglo American, paid executives and prescribed officers R236.68m, largely due to the vesting of the long-term incentive plan (LTIP).

As a result of the vesting of the LTIP in 2018, former chief executive Norman Mbazima received R86m and former chief financial officer Frikkie Kotzee was paid R26.2m.

Mbazima stepped down in 2016 and Kotzee stepped down a year later.

During 2019, Kumba benefited from strong iron-ore prices, which averaged $93.4 (R1.75m) per dry metric ton (dmt) to cost and freight (CFR), up 34percent on the prior year and well above the record low price levels of 2015, when iron ore averaged about $56/dmt CFR.

Kumba’s earnings before interest, tax, depreciation and amortisation was up by 62percent to a record R33.4bn, helped by the strong metal price environment.

It distributed R19.6bn to its shareholders, up from R12.5bn a year earlier.

Kumba’s chairperson, Mandla Gantsho, said 2019 was characterised by the ongoing US-China trade dispute, sluggish economic growth in China worsened by coronavirus, heightened tensions in the Middle East and growing popular concern regarding the impact of climate change.

“Companies, particularly in the resources sector, faced significant investor and public pressure regarding environmental, social and governance issues,” he said.

Gantsho said the optimism generated by the recent changes in South Africa’s political leadership and the reassurance regarding wide-ranging economic reforms remained, but would require evidence of concrete progress if such optimism was to be sustained.

“Investors and civil society will need to see effective implementation of the government’s announced economic policies and a commitment that they will remain in place over the longer term. This will provide the regulatory and policy certainty that investors require to allocate the much-needed capital to our country,” said Gantsho.

He said energy and transportation infrastructure remained constrained, and there was no predictability about when challenges in these critically important sectors would be resolved.

“Under these circumstances, the mining sector is unable to sufficiently capitalise on the many opportunities that exist in South Africa,” said Gantsho.