Mr Price on Friday said the total remuneration of its CEO, Mark Blair, for the year ended in April decreased by R45 million due to the company not meeting its financial objectives.
In its 2023 annual report released on Friday, Blair's total remuneration in the year was R10.6m compared to R56.5m for 2022.
Chief financial officer (CFO) Mark Stirton's total remuneration in the year also dropped from R12.5m to R6.7m.
The group reported that due to the group not meeting its financial objectives, short-term incentives (STIs )were not paid. However, certain qualifying associates, who were key talent with critical and scarce skills, were paid STIs.
Despite this, Blair was not paid an R11.6m as a STI.
The group said the December bonus was paid at the discretion of the group, depending on a number of factors including, but not limited to, the trading results and profitability of the group with escalation linked to tenure.
Mr Price said: "However, over the past few years, this benefit has always been paid out, even in December 2020 amid the uncertainty of the Covid-19 pandemic. It has become the norm that the December bonus is treated as guaranteed, and as such, historically, it was incorporated in the associates’ total guaranteed pay (TGP).
"This was not ideal as it was perceived as though the December bonus had no performance conditions. However, the committee views the December bonus as an important tool in its fair pay journey and to recognise long-serving employees for their commitment and dedication to the company.“
Mr Price said as a first step to align with shareholders, the CEO and CFO were moved from receiving their December bonus by converting this into their respective basic salary for financial year 2023.
"There was no impact on TGP which already included the December bonus component. It was ensured that the parameters used in the determination of STIs and LTIs were also reviewed so that the CEO and CFO were not worse or better off as a result of this amendment to their remuneration structure.
"There was no change to the December bonus structure for the rest of the associates within the group, but this will be considered under a broader remuneration evaluation project which commenced in the 2023 financial year," it said.
The group said its performance and remuneration were impacted by some headwinds.
"The April 2022 floods in KwaZulu-Natal as well as the ongoing, unprecedented load shedding, inflation, and rising interest rates, among other things, have led to more uncertainty and challenges to the country’s economic recovery," it said.
The group said despite these challenges its business model had proven resilient to date, underpinned by its differentiated cash-based, omnichannel, fashion-value retailer offering as well as the acquisition of Studio 88.
The group reported that the operating profit dropped by 0.5% to R4.9bn.
The dividend was slashed by 5.9%, to 759.6c per share from 807.3c in the previous year.
BUSINESS REPORT