ABSA pays former boss Daniel Mminele more than R30m termination package.
By Lehlohonolo Lehana.
Absa's first black CEO Daniel Mminele, who stepped down in April 2021 over differences with the board, was paid R30.47m in a "no-fault" termination agreement with the bank.
According to the banking group's 2021 remuneration report, there was a "mutual separation agreement" between the board and Mminele to terminate his employment on a "no-fault" basis.
A year ago, Mminele quit as ABSA CEO following clashes with the board on how to implement the bank's strategy. At the time, Absa chair Wendy Lucas-Bull said Absa's leadership team also didn't see eye-to-eye with Mminele on how to do things. Arrie Rautenbach has since taken over as new CEO.
The group says "for a speedy resolution and in the best interests of the organisation, the board agreed that Mminele 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 He received cash-equivalent payments. All outstanding awards lapsed on termination."
More than half of the R30.5 million was in the form of a so-called "ex-gratia" ('by favour') payment of R16.5 million following the termination.
In 2020, Mminele was paid R13.66 million for the period January 15 to December 31, with the bulk coming from his total fixed remuneration of R8.66 million.
He received a further R5 million in deferred share awards. This figure excluded the R15 million face value of his long-term incentive award. The full R5 million amount (deferred shares) was paid out as part of the settlement, along with 22% (R3.25 million) of the long-term award from his first year of service.
He also received contractual payments including "R4.5 million in lieu of six months contractual notice, [and] a payment of R750 000 in lieu of accumulated leave."
Absa announced in April last year that the separation "was a consequence of the non-alignment between the board and Mminele on strategy and culture transformation matters".
Group finance director Jason Quinn, who took on the interim CEO role from May 1, was paid a total of R26.355 million. This included fixed remuneration of R6 million, no change on the prior year.
Punki Modise, who served as the group's interim financial director in 2021, earned R23.2 million.
Absa's remuneration committee said the bank delivered a solid performance in 2021 despite an increasingly competitive environment. It wanted to ensure that its remuneration framework remains "fit-for-purpose" and is competitive enough to attract and retain key talent.