Vodacom still handing millions to boss who left a year ago

Vodacom's former CEO Allan Knott-Craig, who left the group in 2009, was paid R16.9-million by it last year, including R11.9-million in a "deferred bonus incentive scheme".

This revelation came as Vodacom continued to fight in the Labour Court to avoid having to reveal a 2008 KPMG report on an investigation into allegations of nepotism and abuse of power when Knott-Craig ran the company.

Vodacom's annual report, released last week, makes no mention of the KPMG report .

The annual report does, however, reveal the two payments to Knott-Craig, including a R4.99-million payment that was part of a "consultancy" deal that saw him make his services available to his successor Pieter Uys.

This unusual consultancy deal was not revealed to all Vodacom's directors, nor to shareholders, until details emerged in the media in February.

While Vodacom chairman Peter Moyo confirmed that Knott-Craig would get another R4.99-million in 2011, he said the former CEO was due no further payments beyond this amount.

Vodacom's annual report reveals that the top six Vodacom employees were paid R56.1-million last year, including an R8.4-million sign-on bonus paid to financial director Rob Shuter.

Uys earned R10.7-million - lower than last year's R14.1-million. But he also took home another R5.2-million by exercising share options that he got in previous years.

Trade unions are fuming that, of the R56-million paid to the top brass, R20-million was in bonuses - despite the fact that Vodacom's net profit fell 32%.

Communication Workers Union (CWU) spokesman Matankana Mothapo described it as "unacceptable to pay that much to people", given the drop in results.

However, Moyo said that although the bonuses were paid, they were slashed from the previous year, in recognition of the lower profit.

For example, Uys received a R4.1-million bonus this year, lower than the R5.5-million he got the year before.

"The reality is that (these directors) were actually punished for the impairments (that caused Vodacom's net profit to drop). Yet the cash flows were strong, and the company didn't make a loss," said Moyo.

While the R8.4-million paid to Shuter is labelled a "sign-on bonus or restraint of trade payment", Moyo said it was necessary to entice someone with the former Nedbank executive's experience to Vodacom.

"If he leaves Vodacom within two years, he has to pay back a portion of that. And whenever he does leave, he can't join a competitor for another two years," he added.

In February, the JSE said it was "looking into" whether Vodacom was guilty of a "lack of material disclosure" to black shareholders of its Yebo Yethu empowerment scheme.

This followed a complaint by Andre van Schalkwyk, who described himself as a "concerned member of the public", that Vodacom ought to have revealed details of the KPMG probe to investors who bought shares in the Yebo Yethu scheme.

Moyo confirmed the JSE had approached Vodacom and "asked for information from us, which we supplied". However, he said the company has not yet heard the result of that inquiry.

Moyo said he would meet investors next week to discuss governance issues, including remuneration. "We're taking these things seriously," he said.