Although a hefty 32% of shareholders voted against MTN’s remuneration implementation report, only 0.001% of them participated in a teleconference called to engage with the company on the issues raised by the report.

Bishop Jo Seoka, chairman of Active Shareholding, which provides voting advice to non-governmental organisation (NGO) clients and was one of two shareholders to have participated in the teleconference, described the level of engagement as disheartening.

“Evidently institutional shareholders believe they have fulfilled their duties by just voting and nothing more needs to be done. This level of engagement may explain why executive remuneration has got out of hand,” said Seoka.

He added that the alternative explanation for the low rate of participation was that MTN had engaged with the large shareholders privately and thus circumvented the more public teleconference process. “That is surely not in keeping with the spirit or intention of the regulations,” said Seoka.

In terms of King IV and JSE regulations, companies that fail to secure 75% shareholder support on the nonbinding advisory vote on remuneration are required to engage with the dissenting shareholders.

Seoka described the teleconference, held on Tuesday, as a useful opportunity to inform the board of Active Shareholding’s concerns and to hear the board’s explanations. The board, represented by lead independent director Allan Harper, acknowledged that one of the main concerns of all the dissenting shareholders was the lack of detailed information on the executives’ short-term incentive plan.

“There are a range of categories and of targets, some are financial, some non-financial,” Harper said during the teleconference, adding that these details had not been disclosed in the group’s remuneration report.

The two shareholders participating in the teleconference also expressed concern about the hefty “signing-on” bonuses paid to CEO Rob Shuter and chief financial officer Ralph Mupita, and that these bonuses will be paid in cash. Shuter is due to be paid out R41m by 2020 and Mupita will be paid out R50m by 2019. The payments are ostensibly in lieu of incentives the two executives relinquished when they resigned from their former employment to join MTN in 2017.

Harper confirmed that although the group’s remuneration policy did not cater for signing-on bonuses, the board had the discretion to make the payment.

Concerns were raised about the independence of the remuneration committee and the dominance of group chairman Phutuma Nhleko, as well as the frequent attendance of the CEO and chief financial officer at committee meetings. Harper responded that Nhleko is retiring from MTN at the end of 2019 and said he believed the committee’s membership balance was independent.

In the brief Sens announcement issued on Wednesday confirming it had engaged with the concerned shareholders, MTN merely noted the participating shareholders had raised certain concerns and “the company has provided appropriate explanations”.

MTN said it has undertaken to table the areas of concern at its next remuneration committee meeting.

Seoka welcomed the commitment to provide all shareholders with details of the teleconference engagement. He noted that there had been engagement after the 2017 AGM, at which only 62% of shareholders supported the remuneration resolution, but there was no disclosure of the concerns raised.

“This year they have given us undertakings; that is encouraging,” said Seoka.