Transaction Capital pays six executives R49 million despite loss of R1.6 billion

Transaction Capital’s executives enjoyed big paydays despite the company reporting a total comprehensive loss of R1.6 billion for the year. Its former CEO, David Hurwitz, was one of the best-paid.

This was revealed in the company’s audited annual financial statements for the year ended 30 September 2024.

Transaction Capital reported that group revenue increased 7% to R1.476 billion in 2024 from R1.377 billion in 2023. However, this was where the good news ended.

The core loss from total operations increased to R2.0 billion in 2024, up from R728 million in the previous financial year. It further reported a comprehensive loss of R1.632 billion for the year.

The company suspended cash dividends “until the group has completed its restructuring,” with no cash dividend declared in the current year.

Despite the dismal financial performance, Transaction Capital said there was hope due to its turnaround strategy.

It raised R1 billion at WeBuyCars, followed by the distribution and separate listing of all WeBuyCars shares still held by Transaction Capital shareholders.

It eliminated holding company net debt and contingent liabilities and disposed of Nutun’s non-core subsidiaries. It also disposed of a controlling interest in Mobalyz.

These actions strengthened its balance sheet, allowing the company to focus on its core businesses.

“This will transform Transaction Capital from an investment holding company into a global specialist Business Process Outsourcing (BPO) operator,” it said in a statement.

“Nutun will become the first South African home-grown BPO to be publicly traded on the Johannesburg Stock Exchange.”

Transaction Capital said despite its achievements over the last year, the poor results show that the transition is incomplete.

Despite the significant losses, Transaction Capital’s executives were well-remunerated in the last financial year.

The company paid Sahil Samjowan, an executive director from 1 June 2023 to 31 May 2024, R15.7 million. It included a prorated incentive as part of this severance package in 2024.

The company said its former chief executive, David Hurwitz, R9 million despite officially leaving the company on 31 December 2023.

The company said that while Hurwitz stood down as CEO and director of all Transaction Capital companies, he is still an employee until 31 December 2024.

“From 1 January 2024 to 31 December 2024, he was required to provide handover services for which he received remuneration of R10.26 million in the 2024 financial year,” it said.

Other executives were also well paid. Mark Herskovits received R9.4 million, Jonathan Jawno R5.7 million, Michael Mendelowitz R4.5 million, and Roberto Rossi R4.5 million.

The company’s prescribed officer enjoyed equally handsome salary packages in the last financial year.

Sean Doherty was paid R15.3 million, David McAlpin received R5.8 million, and John Watling got R5.5 million.

WeBuyCars’ Faan van der Walt received R5.2 million, which included management fees of R2.7 million.

The table below shows a breakdown of the annual remuneration of Transaction Capital’s directors for the year ended 30 September 2024.