[imagesource: Dwayne Senior/Bloomberg]

Trying to steer Steinhoff in the right direction is no easy feat, and the company will always be associated with one of corporate South Africa’s most infamous sagas.

The man currently at the helm, Louis du Preez (pictured above), is trying to mop up the mess left behind by his predecessor, the one and only Markus Jooste.

As we learnt last week, the walls are finally beginning to close in around Jooste.

Back to Du Preez, and some of the staggering numbers he’s been pulling in these past two years.

Below via Moneyweb:

In 2020 Du Preez’s accrued annual bonus and a portion of the long-term incentive, awarded at the beginning of that financial year, amounted to €1.5 million. It accounted for 44% of his total remuneration package of €3.4 million (R62.2 million).

That’s an increase of 26% on his 2019 package of €2.74 million (R49.4 million).

These figures are not going to go down well with long-suffering shareholders who, the remuneration committee notes, were concerned about the “size of the compensation packages in relation to the decreasing size and scope of the company”.

So last year he took home just north of R62 million, on top of the almost R50 million from the year before.

Not a bad haul for two years of slog and grind, no matter how stressful.

Despite concerns from shareholders, Steinhoff’s remuneration committee signed off on that payment structure, due in large part to the unique nature of du Preez’s actual remit as CEO:

Du Preez, a long-term legal advisor to the company, ended up in the CEO position by default and is trying to rescue the company rather than run it. So he is probably being paid as a financial engineering expert rather than a business manager.

This may be why the remuneration committee also chose to ignore shareholders’ concerns about Steinhoff’s remuneration packages being comprised entirely of cash – no share-based awards have been given.

This makes sense as Du Preez is likely to jump ship as soon as the rescue process is completed.

You can read more on Steinhoff’s recently released annual report here, but let’s turn our attention toward the criminal charges coming out of Germany.

Whilst the prosecutor’s office in the northern German city of Oldenburg, which is close to Steinhoff’s European base, haven’t named the three executives being charged, it’s been widely reported that Jooste is one of them.

According to Business Day, the executives are accused of “manipulating the balance sheet by including fictitious transactions worth more than €1.5bn”, as well as over-valuing real estate by as much as €820 million.

Whilst that is going on in Germany, local prosecutors are accused of dragging their heels, whilst the public once again is left with the distinct impression that money and power can ensure there is no accountability for criminality:

…it is hard to accept that the Hawks, which bring cases to the NPA for prosecutions, has no money to investigate anyone implicated in bringing this once high-flying retailer down…

Steinhoff has since agreed to pay forensic auditors at PwC to help the law-enforcement agencies investigate itself. The conclusions that can be drawn from this arrangement are disturbing. By accepting the R30m from Steinhoff, the Hawks are not trying to avoid even the appearance of conflict of interest despite the company having chosen to hide the full PwC report behind the cloak of the so-called legal professional privilege, the undertone of which is that Steinhoff does not want potentially embarrassing details about itself to be exposed.

That arrangement will do little to change the perception that corruption, both in the private and public sector, is something our government has far too much tolerance for.

It’s not exactly sending a great message to potential foreign investors, either.

[sources:moneyweb&busday]