Steinhoff Says Directors Due Extra Pay for Working Harder

JOHANNESBURG (Capital Markets in Africa) – Steinhoff International Holdings NV, the retailer that’s wiped out more than $12 billion of value since an accounting scandal exploded in December, plans to reward directors for having to do more work than usual.

Steve Booysen, head of Steinhoff’s audit and risk committee and part of the supervisory board’s independent committee, is due a once-off payment of 200,000 euros ($247,000) “to cover the additional work undertaken during the period since the accounting irregularities were identified,” the Frankfurt- and Johannesburg-listed company said on its website.

Steinhoff proposed that Heather Sonn and Johan van Zyl , also part of the independent committee, are paid an extra 200,000 euros and 100,000 euros respectively because of the “exceptional demands” being placed on them.

Steinhoff shares cratered when the retailer announced Dec. 5 that irregularities would force it to restate financial results and Chief Executive Officer Markus Jooste quit. Eight banks have said they lost more than $1 billion on loans linked to Steinhoff. The owner of retail chains including Conforama in France and Poundland in the U.K. has had to sell its private jet, dispose of stakes in various companies, offload a flagship store in Vienna and negotiate with banks in order to stay afloat.

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All members of Steinhoff’s supervisory board should get paid for extra meetings, the company said in the notice ahead of its annual shareholder gathering on April 20 in Amsterdam. The retailer is proposing the chairman gets 4,000 euros per meeting and the members receive 3,000 euros per meeting. Further, Theunie Lategan and former lead independent directorLen Konar, who both resigned from the supervisory board at the end of February, should each be paid an additional 40,000 euros, it said.

The auditors and the audit committee failed to identify Jooste’s actions and “we do not believe that he could have masterminded this without assistance,” David Levinson, an analyst at Avior Capital Markets, said in a note to clients this month. “Red flags internally should have been raised earlier,” he said. “The situation at the company was enabled by undue power dynamics within the board. The board failures appear exacerbated by insufficient director independence.”

The retailer, which has plummeted more than 90 percent since the accounting scandal erupted, fell as much as 10 percent to a record low in Frankfurt on Friday. It was 3.5% lower at 0.21 euros as of 12:27 p.m. in Germany.

Booysen, Sonn and Van Zyl were “required to make extraordinary time commitments and be readily available for unscheduled ad-hoc meetings, deal with stakeholders, such as regulators, investors and shareholders,” Steinhoff said in an emailed response to questions. “The proposed amounts are in recognition of the extraordinary effort that they have made, and continue to make, in order to stabilize the company and restore value to investors.”