Vodacom stunned South Africa last week when it announced that current CEO Pieter Uys will be replaced as Vodacom head by Shameel Joosub.<\/p>\n
Joosub is the current CEO of Vodafone Spain, and previously served as the MD of Vodacom. He is well-respected among the local investor community, and his experience at Vodacom made him a logical successor to Uys.<\/p>\n
However, the fact that Joosub is a worthy leader to fill Uys\u2019 shoes did little to silence questions about why Uys so suddenly decided to leave Vodacom.<\/p>\n
Uys told Moneyweb that, when he was appointed as CEO, he always knew that he would be in that position for three to five years, before he had to change.<\/p>\n
Uys further pointed to a lifestyle change and the possibility of moving to Stellenbosch. \u201cMy son is currently in matric and wants to study at the University of Stellenbosch next year. We are thinking of moving with him to Stellenbosch,\u201d he told Moneyweb.<\/p>\n
When the term \u201clifestyle change\u201d is mentioned, especially in relation to a CEO who is in the prime of his life and who has produced excellent results and leadership to the company, the alarm bells go off.<\/p>\n
Unsurprisingly, speculation on the real reasons behind Uys\u2019 resignation started circulating, and the most prominent rumour suggest that Uys had battles with Vodacom\u2019s parent company Vodafone over Affirmative Action (AA) and Black Economic Empowerment (BEE) related issues.<\/p>\n
Uys\u2019 performance as CEO<\/strong><\/p>\n Uys lead Vodacom to its listing in May 2009, and has shown annualised returns of 28% to investors since it listed. To show exactly how good Uys was at his job, one can compare Vodacom\u2019s performance to its closest rival, MTN.<\/p>\n Moneyweb editor Ryk van Niekerk showed that if you invested R1,000 in Vodacom on the first day of the listing, and reinvested dividends, you would now have R2,115.<\/p>\n Van Niekerk said that MTN, in comparison, had an annual return of 10%. This means that a R1,000 investment would have grown to approximately R1,328.<\/p>\n Vodacom’s financial performance, therefore, dwarfed MTN\u2019s comparative figures over the same period, despite the fact that MTN has shown good returns in its own right.<\/p>\n Van Niekerk further highlighted that Vodacom grew its subscriber numbers from 39.6 million in 2009, to 48 million under Uys\u2019 watch. The number of broadband customers grew from 720,000 to 12.2 million.<\/p>\n Additionally, it is well-known that Uys is respected and liked by Vodacom\u2019s staff, which further pointed to a leader which should enjoy an extended stay at the company.<\/p>\n Behind Uys\u2019 departure<\/strong><\/p>\n With such an exceptional financial performance from Vodacom, one would expect the major shareholder (Vodafone) to beg the CEO to stay at the company for as long as these results continue. Why risk changing the leadership when the company is performing so well?<\/p>\n According to industry speculation, the company\u2019s battle with AA and BEE targets in management has played a role in Uys’ departure.<\/p>\n It is rumoured that Vodafone, under pressure from the SA government, came down on Uys because of the company\u2019s struggle to show a strong black management at the company.<\/p>\n The departure of Sipho Maseko may have added fuel to the fire. Vodacom officially stated that it was Maseko\u2019s decision to leave the company to pursue other interests, but because of his \u201cwith immediate effect\u201d resignation, many people speculated that he was fired because of non-performance.<\/p>\n Uys\u2019 dedication to do the best he could for Vodacom, and not stand for second best from his management team, may therefore have caused friction between him and his largest shareholder, Vodafone, because of the AA and BEE targets.<\/p>\n It is further rumoured that interference from Vodafone in the management of Vodacom made it difficult for Uys to execute his strategy.<\/p>\n Vodacom officially denied all of these rumours, and Uys said that \u201cVodafone is a good shareholder and parent company. They have always supported us well.\u201d<\/p>\n Uys also dismissed rumours that he may join former Vodacom CEO, Alan Knott-Craig at Cell C. \u201cNo. My blood is red,\u201d said Uys.<\/p>\n Related articles<\/strong><\/p>\n Vodacom CEO Pieter Uys to move on<\/strong><\/a><\/p>\n Good value Vodacom not without challenges<\/a><\/strong><\/p>\n Vodacom a good bet: analyst<\/strong><\/a><\/p>\n