Roughly R25m in shares will be awarded in August, which offsets those forfeited by the delay of achieving break-even.
Sean Summers, CEO of Pick n Pay. Picture: Supplied
Retailer Pick n Pay, which in the midst of a complex multi-year turnaround, says it intends to award CEO Sean Summers additional units under its restricted share plan (RSP) in August.
Its remuneration committee (Remco) says this decision was taken after feedback from shareholders on the original R100 million share incentive given to him in 2024 to fix the business.
The group says the award “increases the emphasis on stretching financial performance measures aligned to the successful delivery of the Pick n Pay turnaround plan and the Boxer growth strategy”.
Due to it announcing a one-year delay in achieving break-even in May, Summers forfeited one million shares from that original award. Although technically under a separate RSP scheme, in practical terms this award will offset the tranche of forfeited shares.
The bulk of the weighting of this new award (65%) will be linked to the core Pick n Pay business achieving break-even (on a trading profit after leases basis) in the 2029 financial year.
The remaining conditions are for Boxer to achieve its FY29 targets (35% weighting) and Pick n Pay ESG targets (5%).
It has not disclosed the quantum of the award, but based on those to be made to new CFO Tina Rookledge under RSP 6, the allocation for executive directors will equate to 100% of total guaranteed pay.
Summers received total remuneration (in the form of fixed pay only) of R25.2 million in FY26 which means the award will be just more than R25 million.
(Under a stricter single-figure disclosure, Summers is deemed to have received R56.7 million in remuneration because of how it accounts for the value annually of his share awards.)
These shares will vest in February 2029 (the end of its FY29 financial year) and the group notes that this “extends beyond the CEO’s planned retirement date and is intended to reinforce alignment with the successful completion of the turnaround and an orderly leadership transition”.
Still, after pushing out the return to break-even by a further year, executives will be rewarded even if the Pick n Pay segment reports a loss in 2029.
Under the CFO’s performance condition related to achieving trading profit in FY29, the ‘stretch’ is to hit break-even. This will trigger 100% vesting. The ‘threshold’ for vesting under this condition is a trading loss of R1 billion, when 50% will vest. A loss of R600 million will see a vesting rate of 75%. While not specifically disclosed, one assumes the conditions for Summers will be identical.
In July 2024, Summers was awarded four million performance-based RSP shares tied to three specific conditions (and timelines). At a current share price of around R20, these are valued at R80 million.
The first tranche of these (two million shares) was linked to the implementation of new leadership and operating structure, and these vested in October 2025.
At the time, the deemed price per share was R28.30, which valued the tranche at R56.6 million. Summers retained all two million shares.
Due to the “revised turnaround timeline” communicated by the group in May, the third tranche, which would’ve unlocked a further one million shares, was forfeited.
The vesting period for the second condition for the development and implementation of the CEO succession plan (originally February 2027) has been amended to February 2028 (another one million shares). The group’s Remco says this was done “to align more closely with Sean Summers’ retirement date of May 2028”.
It also, usefully, buys him a further year to implement the succession plan.
In terms of his employment contract, he is eligible to participate in its short-term incentive scheme from the current financial year (FY27). He did not participate in FY26.
For the RSP shares to be awarded to Summers, the group’s remuneration policy and implementation report need to be approved by shareholders at its AGM on 6 August.
Last year, those two resolutions received votes in favour of 75.14% and 76.9% respectively. At the time, those were advisory (non-binding), but changes to the Companies Act now mean strict statutory obligations for companies. These came into effect from 22 May.
This article was republished from Moneyweb. Read the original here.
