MARCEL Golding, a former trade union boss and worker activist, has defended the selective extension of an interest-free R200m loan to five Tsogo Sun directors, saying they were “key” and “fundamental” to the business and other employees had not been intentionally ignored.

Mr Golding said general employees were more concerned with issues such as medical aid, provident funds and housing allowances, rather than incentives such as share options.

The loan, which also has no fixed repayment period, was extended to the directors to allow them to buy shares as SABMiller divests its 39.6% stake in Tsogo Sun.

Mr Golding is chairman of Hosken Consolidated Investments (HCI), which is a large shareholder at Tsogo. He is also a nonexecutive director of Tsogo Sun.

“These are key executives … these are executives fundamental to the business. Senior executives are normally compensated differently … the intention is not to ignore other employees,” Mr Golding said in defence of the arrangement.

“It’s not to say that we are ignoring general staff.

“The fact (that) these employees have shares does not mean we will stop evaluating (compensation for) the entire workforce.”

A senior member of staff at Tsogo on Thursday said employees were dismayed and embarrassed by the selective award.

This proposal was “in stark contrast” to the values espoused by the company, which include “teamwork, service, opportunity growth and ownership”, the source said. All the beneficiaries were men, and four were white.

Asked why the interests of 13 other executives and more than 9,000 other employees had not been aligned through this favourable loan, Mr Golding said remuneration was “constantly reviewed”. “The remuneration committee evaluates whether we are paying competitive salaries. For the work that workers do, we pay them competitively,” he said.

Employee share ownership schemes were often rejected by general employees as some wanted short-term cash, Mr Golding said. “The question is whether they are willing to forego immediate cash for long-term incentives. Employees have always wanted immediate cash.”

Mr Golding said he was not trying to ignore the debate on the gap between workers’ and executives’ pay. “We are focused on trying to make sure our employees are happy and that conditions are good. We try our best to do what’s necessary and what’s possible,” he said.

Asked if the company would issue more shares to general staff in the future, he said this was not on the agenda and no request had been made.

Mr Golding said an interest-free loan was not unusual as the beneficiaries would have to comply with tax rules on fringe benefits.

SABMiller’s exit will see 305-million Tsogo shares placed with selected institutional investors in South Africa and abroad.

The five executive directors will have an option to buy some of the shares that are being placed.

The buyback will lift HCI’s interest in Tsogo to 47% from 41.3%.

Tsogo CEO Marcel von Aulock has been assigned R86m of the R200m facility, chief financial officer Rob Huddy R27m, human resources director Vusi Dlamini R20m, gaming MD Jacques Booysen R47m, and legal director Graham Tyrrell R20m.

Source: BDLive – Phakamisa Ndzamela