Former Naspers boss scores R330-million payday

Former Naspers CEO Bob van Dijk received R330 million from the company over the last year, and there will be much more in the current financial year.

Naspers provided details about the remuneration paid to Van Dijk from 1 April 2023 to 31 March 2024 and the agreed severance.

The latest Naspers annual report showed that Bob van Dijk received $18.269 million in the last financial year. At the current exchange rate of R18.07/USD, this equates to R330 million.

His remuneration included a base salary of $1.469 million, Naspers performance share units of $3.714 million, and Prosus performance share units of $4.938 million.

There were also Naspers Global eCommerce share appreciation rights of $4.350 million and Naspers and Prosus share options of $1.441 million.

The severance payment qualifies as an appropriate, all-inclusive compensation for loss of office.

Van Dijk undertook to remain available for consultation and guidance and entered into a consultancy agreement commencing on 1 April 2024 and terminating on 30 September 2024.

He will receive a gross fee of €113 436.18 per month (R2.2 million per month) for the consultation and guidance services to Naspers and Prosus.

However, this is not the end of the story. Naspers pointed out that he will be entitled to an additional gross payment.

This is to compensate him for the lapse of certain long-term incentives should the performance conditions for the Prosus and Naspers performance share units (PSU) granted in 2021 be met.

“This additional payment will equal the amount he would have received if continued vesting of the relevant PSU awards had been possible regarding the scheme rules,” Naspers said.

The amount payable will be fixed at the value of the PSU awards on the date they would have vested and payable on 26 August 2024 and 21 June 2024, respectively.

Bob van Dijk’s exit

Piet Viljoen, fund manager at Merchant West Investments Value Fund

On 18 September 2023, Naspers and Prosus informed shareholders that Van Dijk had stepped down as chief executive and director.

The Naspers and Prosus boards have mutually agreed that Van Dijk should immediately step down from these positions.

“Van Dijk has agreed to assist with the transition after this date and will remain as a consultant to the group until 30 September 2024,” the companies said.

Van Dijk succeeded former Naspers CEO Koos Bekker in 2014. He has been the CEO of Prosus since its listing in 2019. Bekker is the chairman of Naspers and Prosus.

He headed up eBay Germany, that company’s biggest market outside the US, and was COO of Schibsted’s Classifieds.

Naspers tried to candy-coat the fact that Van Diik was booted from the company, saying he established the group as a leading global consumer internet company.

They even said that Van Dijk created significant value for shareholders even though many analysts said the company has destroyed tremendous value.

Merchant West Investments Value Fund manager Piet Viljoen is one of Naspers’ vocal critics, highlighting what happened under Van Dijk’s watch.

He said Naspers’s management destroyed tremendous shareholder value and got fabulously wealthy in the process.

Naspers bought a 46.5% stake in Chinese internet company Tencent in 2001 for $32 million, an investment that made it the multi-billion company it is today.

Tencent became a cash cow for Naspers. The new Naspers management team inherited this cash cow and decided to look for the new Tencent.

However, through numerous bad investments and stupid deals, the cash is incinerated, and shareholders lose out.

Despite the bad deals, the new management team became fabulously wealthy, which caused unhappiness among many shareholders.

“The new management team doesn’t listen, putting in place more ridiculous structures to keep buying time,” Viljoen said.

After the market continued its vociferous opposition to the management team’s actions, they eventually listened and bought back shares instead of throwing cash in the furnace.

“The new management team celebrates this success like it was their own and becomes even wealthier,” Viljoen said.

Naspers directors selling shares

Bob van Dijk, former Naspers CEO

Shortly after the share buyback was announced, non-executive directors started selling millions of rands in shares.

Naspers CEO Bob van Dijk did the same, selling R1.72 billion in Naspers shares in seven transactions amidst the buyback program.

During the same period, Naspers’ financial director Basil Sgourdos also sold R98.9 million in Naspers shares.

“Directors of Naspers are selling large chunks of shares while the company is in a buyback program. Have they no shame?” Viljoen said.

Viljoen said if Naspers’ management was truly concerned about creating shareholder value, they would unbundle their Tencent stake and give investors the full value of their holding.

Many investors would argue that the Naspers management team deserves their riches, especially after the Naspers share price increased 77% over the last year.

Viljoen explained that the share price rise was due to the share buybacks closing the gap to NAV rather than to performance in the rest of the Prosus portfolio.

An analysis by Daily Investor in January 2023 showed that Naspers destroyed tremendous shareholder value over the last decade.

It revealed that a R100 investment in Tencent in 2004 would be worth R48,545 today, a 39.7% annualised return over eighteen years.

In comparison, the R100 investment in Naspers would be worth R10,641 today. This showed how much value was destroyed.

Considering this value destruction, it is not surprising that Naspers’ remuneration methods have been a controversial topic among shareholders.

In 2017, 50% or more of Naspers N shareholders appeared to have voted against the company’s controversial remuneration policy.

Nearly 60% also voted against giving directors control of unissued shares, indicating their unhappiness with the board’s performance.

More recently, Van Dijk’s pay has come under fire, with shareholders objecting to how it is tied to Tencent’s growth and performance.

At the company’s annual general meeting in August 2023, 79.40% of Naspers N shareholders voted against the company’s remuneration policy.

However, shareholders’ concerns were dismissed. Naspers A shareholders, who carry voting rights equivalent to 1,000 N shares per A share, voted in favour of the policy, swinging the vote.

Bob van Dijk’s remuneration