Sasol shareholders vote against the company's remuneration policy at AGM

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  • Some Sasol shareholders raised concerns about the company's remuneration policy - and voted against it at the AGM.
  • Board chairperson Sipho Nkosi describes the vote against the policy as a "moment of great regret".
  • Sasol has battled several headwinds in the past financial year, including the impact of the oil price volatility and severe weather patterns in the US.

Sasol shareholders voted against the company's remuneration policy during an Annual General Meeting (AGM) on Friday, which saw executives face intense scrutiny over its payment model, given the firm's fragile financial performance.

The company's remuneration policy had come under fire from concerned stakeholders. 

Non-profit shareholder activism organisation, Just Share, had earlier indicated it would oppose the remuneration policy on the grounds that it does not incentivise senior executives to urgently tackle the looming crisis presented by climate change.

"We take the message you have conveyed to us by how you have voted on the implementation report on the remuneration policy and some of our other resolutions," said chairperson Sipho Nkosi.

"We get the message," he added. 

Nkosi said the company will consult with shareholders on the matter and described the vote as a "moment of great regret".

The company announced on Wednesday that it has taken a decision to cut directors' fees by 20%, in light of "the erosion of shareholder value over the past two years", which has hit its financial position.

"This fee sacrifice shall remain in place until a revised fee proposal is considered by shareholders at Sasol's 2021 AGM," the company said. 

Sasol has battled several headwinds in the past financial year, including the impact of the oil price volatility, severe weather patterns in the US that shut down parts of its chemicals project in Louisiana, and the impact of the Covid-19 lockdown.

Nkosi said the immediate priority to the challenges faced by the company was a cash conservation drive to shore up the balance sheet and that they were repositioning the business to be resilient, even if the oil price hit $45.

"The board is keenly aware that the past year has been a challenging one for our shareholders. Since the last AGM a year ago, the share price has fallen around 60% and we suspended the dividend as part of the ongoing cash preservation measures," he said.

"We acknowledge that our share price has been highly volatile and underperformed our peers," Nkosi said, adding that the volatility could, in part, have been drive by the impact of hurricanes and storms in Louisiana and the potential rights issue to be launched in February 2021.

The weak financial position of the petrochemicals giant prompted it to sell 50% of the base chemicals unit at Lake Charles to LyondellBasell for $2 billion.

CEO Fleetwood Grobler said the remaining 50% of the base chemical exposure in the LCCP positions Sasol to participate in the commodities recovery over the next few years.

Former Sasol CEO David Constable, who spearheaded the investment in the US chemicals project, is now heading Fluor Corporation, a contractor involved in the development. 

Sasol executive director Vuyo Kahla dismissed a concern raised by a shareholder on Constable's new role in the project, given his history in its conception during his time at Sasol.

Kahla stated that Constable has not been part of Sasol since June 2016.

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