Struggling Pick n Pay pays former CEO R25 million

Pick n Pay, which is technically insolvent, paid former chief executive Pieter Boone R25.3 million last year. It included a salary of R9.5 million and a termination settlement of R15.8 million.

Boone, the former chief operating officer of German multinational Metro AG, replaced Richard Brasher as Pick n Pay CEO on 21 April 2021.

Pick n Pay chairman Gareth Ackerman said at the time that he was delighted that Boone would succeed Brasher as chief executive.

“We had many possible candidates, but we knew when we met Pieter Boone that we had found the right person,” Ackerman said.

“His wide-ranging experience will stand him in very good stead across all areas of the Pick n Pay business, including Boxer and franchise.”

Fast-forward two-end-a-half years, and things did not work out as Pick n Pay and Ackerman expected.

Boone’s Ekuseni strategy was a disaster, and the retailer is now rolling back many of the changes implemented under his leadership.

In October 2023, Pick n Pay replaced Boone with Sean Summers, who served as chief executive between 1999 and 2006.

Summers is tasked with turning around the performance of the Pick n Pay Retail core engine, which has been struggling.

Pick n Pay’s latest results showed why the retailer booted Boone and brought back Summers, a company stalwart.

The company reported a 373% decrease in net profit, dropping from a R1.17 billion profit to a R3.2 billion net loss.

For the first time, Pick n Pay has become technically insolvent. Total liabilities exceed total assets by R183 million.

Even more concerning is that its interest-bearing debt rose by R5.7 billion from a year ago. Interest on debt now costs it R2.4 billion a year.

As a result, Pick n Pay has breached all its debt covenants, pointing to serious problems at the retailer.

The retailer is in serious financial trouble, which forced it to raise capital through a rights offer and listing Boxer to strengthen the balance sheet.

Pieter Boone’s R25 million payday

Despite Boone’s dismal performance as Pick n Pay chief executive, he received a handsome golden handshake last year.

Pick n Pay’s latest results showed that Boone received a total remuneration of R25.3 million over the last year.

The remuneration included a termination settlement in terms of his employment contract of R15.8 million.

Incoming chief executive Sean Summers received a salary of R10 million for his work as CEO from 30 September 2023 to 25 February 2024. That equates to R2 million per month.

If Summers is successful in turning around Pick n Pay, this would be the best investment the retailer has ever made.

Ackerman, who will step down as chairman in 2025, received a total remuneration of R4.9 million.

The table below shows Pick n Pay directors’ remuneration and interest in shares for the last financial year.


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