Spar’s old fashioned AGM

Unlike Ninety One and Sygnia, which banned the media from their annual general meetings and would only allow shareholders to attend, the Spar Group says its meeting on Tuesday is open to all.

The catch is that the physical meeting is being held at the company’s head office in Pinetown, 16km west of Durban in KwaZuklu-Natal.

Even those who are confident the authorities have brought the second wave of Covid under control might be reluctant to make the trip. Perhaps even those shareholders who live in Pinetown will be reluctant. There might be some good reasons for risking reasonably close contact with other humans in these Covid lockdown days, but attending an AGM is probably not one of them.

Perhaps in mid-December, when the group released its annual report with details of its AGM plans, the board was much more optimistic about the course of this unrelenting pandemic than almost anyone else in the world. It certainly wasn’t to know that a new, even more debilitating strain was soon going to be identified in their neighbourhood.

Read: Spar’s Tops and Build IT buckle under pandemic pressure (May 2020)

It’s not that the board was unaware of Covid-19. The notice of the AGM has a section on ‘Covid-19 Protocols’ to be observed at the meeting, including: “Do not attend the meeting if you are unwell, have a fever, cough or respiratory symptoms.” Shareholders are reminded of coughing etiquette, as well as the need for regular handwashing and sanitising. A Covid-19 visitor’s form will have to be completed, and temperatures will be checked. Masks are compulsory and social distancing guidelines will be enforced, says Spar’s AGM notice.

‘Electronic participation’

Those shareholders who aren’t sufficiently comforted by the fact that Spar is going to enforce Covid regulations might have taken heart from the section of the AGM notice offering electronic participation.

So it seemed Spar was arranging a hybrid AGM – a mix of in-person and electronic participation. A win-win solution, making the most of technology to deal with the impact of the pandemic.

But it turns out this multi-billion-rand group’s idea of electronic communication is the telephone.

The telephone, which was invented in 1876, pre-dates the internet by about 115 years and Zoom by 135 years. Hardly cutting-edge.

A year ago the telephone might have seemed a reasonable option, most of us knew no better. But even a year ago attending a meeting through the use of 145-year old technology was a very inferior option.

It’s not as though the group hasn’t had 10 months to figure out how to use Zoom for its AGM. Since April 2020 most listed companies, with a few notable grim exceptions, have demonstrated an easy adroitness with this 21^st Century technology, using it to provide their shareholders with reasonably good quality interaction.

Read: Zoom soars on surging sales, forecasts that swamp estimates

But perhaps the Spar board isn’t entirely to blame for this rather bizarre situation.

Shareholder interest

It seems when it comes to Spar shareholders, you reap what you sow. A spokesperson for the company confirmed that the electronic participation facility is indeed the telephone.

However, she added: “In planning the meeting we considered alternatives but given that for the past six years, less than six shareholders in total have attended the AGM and that we seldom have had requests from shareholders to attend electronically, we decided to retain the current format, whilst putting the necessary Covid-19 protocols in place.”

The spokesperson noted that they had only received requests from two shareholders to attend this year’s AGM ‘electronically’.

That is either a shocking reflection of institutional shareholder apathy or an indication of how much engagement actually happens behind closed doors.

Read: The Spar shareholder’s seven-year journey (Jan 6)

And it’s not as though there aren’t a few issues that need discussing in a public forum.

Perhaps one of the two intrepid shareholders that expressed an interest in attending will get clarification on a few of the remuneration oddities.

For example, was it really necessary to award outgoing CEO Graham O’Connor a “retention” bonus for postponing his retirement for one year?

Linked to that, why has O’Connor been appointed chair?

No doubt he has served the group well since he was appointed CEO in 2014 but his seamless transfer to the chair falls foul of good corporate governance practice.

Creating a lead independent director role is unlikely to address the resulting concerns particularly as it comes at a cost of an additional R1.3 million in non-executive fees.

The two lone shareholders might also get some clarification on the exclusion of the recently acquired – and loss-making – Polish business from some of the performance metrics used to reward executives.

Read: Spar sees Polish business breaking even in 24 months (May 2020)

Finally, there’s the special bonus awarded to senior managers for their “fantastic contributions” to managing the business during the extremely difficult times caused by the Covid-19 pandemic.

The attending shareholders might get clarity on what, if any, bonuses were awarded to the frontline staff who also made “fantastic contributions” at considerable risk to their health to ensure we were able to continue getting our groceries.