Vodacom and MTN shareholders suffer while their CEOs made millions

An analysis of CEO salaries and share price growth revealed that Vodacom and MTN shareholders suffered while the chief executives significantly increased their salaries.

MyBroadband compared the CEO salary increases and share price growth over the last ten years to see if these figures align.

A chief executive officer’s most important responsibility includes developing and executing a strategy that aligns with shareholder interests.

The CEO, in partnership with the board, must make decisions and take action to serve the interests of shareholders.

Simply put, the chief executive officer and the board must look after shareholders and ensure they receive a good return on their investment.

The board should ensure that the CEO’s pay package is aligned with shareholder interests. It is often linked to the share price.

MyBroadband compared CEO salary increases to the share price performance over the last decade for Vodacom, MTN, and Telkom to see whether their boards are doing their job.

This analysis revealed that Vodacom and MTN’s chief executives received large pay package increases while shareholders suffered significant wealth destruction.

Vodacom CEO Shameel Joosub’s salary increased by 376% over the last ten years — from R13 million to R62 million.

The Vodacom share price fell from R132.58 to R98.55 over the same ten-year period — a 26% decline.

This means that the Vodacom board rewarded its chief executive through a 376% pay package increase while shareholders lost money.

The same happened at MTN. Between 2013 and 2023, the MTN chief executive’s salary increased by 67%.

Former MTN CEO Sifiso Dabengwa was paid R48 million in 2013, while the current CEO Ralph Mupita received R80 million last year.

Over the same period, the MTN share price declined by 44%. This means the MTN board significantly increased the CEO’s pay package while shareholders suffered.

Telkom’s chief executive’s pay package aligned much closer with the company’s share price than Vodacom and MTN’s.

Former Telkom CEO Sipho Maseko was paid R11.7 million in 2014. The current CEO, Serame Taukobong, received a pay package of R12.4 million in the 2024 financial year.

The Telkom share price declined from R32.71 to R30.00 during the same ten-year period.

This means the Telkom CEO’s salary increased by 6% over the last ten years, while the share price declined by 8%.

Considering these figures, it is easy to understand why there are calls to better manage executive salaries in South Africa.

Just Share executive director Tracey Davies has previously called for ways to address high pay packages for poor-performing CEOs.

She said a small group of elite people with close relationships are behind the high executive pay packages.

“Any significant lowering of executive remuneration rates, clawbacks, or salary drops will affect the whole group,” she said.

This small group, who typically sit on multiple boards, look after their own interests to ensure their salaries remain high.

Therefore, the remuneration structures they approve serve the executives and board members rather than shareholders.

Davies said the simplest way to address the problem of high executive pay despite poor performance is a binding shareholder vote on executive pay.

The table below shows the CEO salary increases versus the share price for Telkom, Vodacom, and MTN over the last decade.

The last column shows how much shareholders gained compared to the CEO’s salary.

Company	CEO salary increase	Share price increase	Shareholders versus CEO
Vodacom	376%	-26%	-402%
MTN	67%	-44%	-111%
Telkom	6%	-8%	-14%