DANIEL Mminele, Absa's former chief executive who stepped down in April 2021, was paid R30.47 million in a termination agreement with the bank, according to the financial service's annual report released yesterday.
Mminele, the lender’s first black CEO, exited the group citing differences of opinion on strategy with the board, in particular its chairperson Wendy Lucas-Bull, after little more than a year in the position.
Lucas-Bull who stepped down in March as chair after a nine-year stint, said in her last comments on the bank's 2021 annual report, “The decision by Absa and former group chief executive, Daniel Mminele, to part ways in April 2021 was regrettable, resulting in a mutually agreed separation that was in the best interest of both parties."
In the report, the bank said the termination of Mminele's employment was a no-fault basis.
"The separation was a consequence of the non-alignment between the board and Daniel on strategy and culture transformation matters. Daniel stepped down as group chief executive on April 20, 2021, with his last date of service as an employee being April 30, 2021," the group said.
The bank said for a speedy resolution, the board agreed that Mmniele would receive a termination payment that would include good leaver treatment on unvested short-term incentive deferrals and unvested long-term incentives, in respect of which Daniel received cash-equivalent payments.
The bank reported that it had paid Mminele a lump sum that included numerous negotiating factors. The R16.5m was a ex-gratia "by favour" payment, and an extra R4.5m six months notice payment on behalf of the termination of his contract. Mminele's payment also included R5m in place of his 2020 short-term incentives, which had been put back in Absa group shares.
Mminele also received R3.25m on behalf of his 2021 long-term incentive award and R750 000 towards his accumulated leave.
According to Absa, these payments were made after deducting tax and other statutory contributions. The bank said it contributed towards Mminele's legal cost totalling R466 000.
Arrie Rautenbach, who succeeded Mminele as chief executive collected R25.2m in 2021. This included a base total cost to company of R7.26m, short-term incentives of R12.5m, and long-term incentives of R3.46m.
Rautenbach also received R2m in other payments, the bank said.
The bank's appointment of Rautenbach last week was condemned by the Public Investment Corporation (PIC), which is a majority shareholder, citing it as a missed opportunity for transformation.
The PIC said in its correspondence with the board, that the appointment was a missed opportunity for the board to publicly demonstrate its commitment to “purposefully transform the banking group and advance diversity, inclusivity, and racial and gender equity, at the most senior levels of organisation”.
In the annual report, Lucas-Bull, in a swan song, said, “The alignment between management and the Board is vital in forging a holistic approach to advancing transformation, diversity and inclusion across the Group.
“We were delighted to welcome Sello Moloko to the Board as an independent non-executive director and Chairman designate on December 1, 2021.”
Sello took over as chairman of Absa from April 1.
BUSINESS REPORT ONLINE