R83 million payday for Shoprite CEO

Shoprite recorded a strong performance over the last year, with its CEO Pieter Engelbrecht’s pay package rising to R83 million.

Shoprite is South Africa’s largest retailer, and its total customers in South Africa are over 30 million.

For the 52 weeks ending 30 June 2024 (FY24), Shoprite saw a 12.0% increase in group sales. Its core South African supermarket customers spent R21.4 billion more than the previous year.

Checkers and Checkers Hyper saw 12.3% sales growth, with 26 new stores opened and 12 store upgrades.

65 smaller, adjacent stand-alone stores were opened in the period, including 34 Petshop Science premium and pet stores and 14 UNIQ clothing by Checkers stores.

In terms of smaller, adjacent stand-alone stores, 65 were opened in the period:

Checkers Sixty60 increased sales by 58.1%(2023: 81.5%), and the number of stores it services customers increased to 539 (2023: 466).

The group also announced that it was selling its furniture business, including the OK Furniture and House & Home brands but excluding Angola and Mozambique operations, to Pepkor Holdings.

“With respect to our furniture business, we found ourselves at a crossroads with the business’s future growth and profitability hamstrung by the requirement of a level of investment that would have resulted in us re-directing capital and project management resources away from that currently dedicated to our food retail operations,” said Engelbrecht in the group’s results.

“We believe the best outcome for OK Furniture and House & Home is for the business to operate in an environment where its required infrastructure and credit management expertise exists, thus allowing us to focus our resources on what we do best.”

When it comes to financials, the group’s headline earnings per share jumped by 7.2% to 1,250.5 cents per share.

The group thus increased its dividend by 7.4% for the year, returning R3.9 billion to shareholders.

Pay increases

Amid the group’s strong financial results, Engelbrecht saw his single-figure remuneration increase from R64.67 million in FY23 to R83.27 million in FY24.

The CEO’s salary received an inflationary 6.6% increase for the year, taking it to R18.86 million.

The group, however, noted that the executive salary structure changed during FY 2024 with the introduction of the Executive Deferred Incentive (EDI).

The table below reflects a breakdown of Engelbrecht’s earnings, which includes a R14.7 million deferred STI that will only be paid out in FY 2026:

When it comes to CFO Anton de Bruyn, the group said that an executive benchmark done in FY23 revealed that the CFO’s Total Guaranteed Package (TGP) is below what was observed in the market.

Thus, in July 2023, the CFO was awarded a 16.0% increase, bringing his salary to R7.77 million.

Of De Bruyn’s R32.85 million single-figure remuneration, R6 million was in a deferred STI that will only be paid out in FY 2026:

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