TFG AGM: Executive Pay, Director Votes Face Strong Dissent

Retailer TFG saw strong opposition at its Thursday AGM to a number of resolutions, the largest of which was the near-unprecedented non-re-election of its lead independent director to the board’s audit committee. The resolution (number six) saw Graham Davin receive votes totalling just 52.07% in favour – a full 47.93% voted against his appointment. This is a clear signal being sent to the lead independent who has been on the board since 2015. Read: TFG slumps to levels last seen in 2010 TFG commences Section 189 process Foschini Group to close 280 stores through 2029 TFG has been under pressure for 13 months, since a disastrous profit warning just two months after a bullish capital markets day. It warned of a 20% to 25% decrease in earnings for the first half, saw the share sold down 17% on the day. Over the past year, its shares are down 49% despite a modest recovery following its full-year trading update last week that saw shares up 6%. A further four resolutions saw votes against of over 25%, with the crucial remuneration ones (on policy and implementation) failing to cross the 75% hurdle. Under the amended Companies Act, these votes are now no longer ‘non-binding’. Last year, the group just missed that previous threshold of 75% (74.22%) for the implementation of its remuneration (from a 77.02% vote in 2024). More sources of displeasure The group completed a R1 billion share buyback in September and October, where it bought back 3% of its shares at an average of R105.87 a share. It borrowed the money to affect this buyback. Read: TFG borrowed R1bn to buy back shares that are now worth R553m Shareholders are also displeasured about this, with 35.15% of those at the AGM voting against the group’s authority to acquire shares. There is also a fair amount of shareholder dissent against non-executive director Boitumelo Makgabo-Fiskerstrand, who has been on the board since 2012. In 2024, her appointment to the audit committee was opposed by 36.66% of shareholders who voted. Last year, for the same resolution, the number was 37.84%. This year, her election to the social and ethics committee drew opposition of 27.45% of votes. This means that a large portion of TFGs biggest shareholders are voting against these resolutions. At the end of the last financial year, its biggest shareholders were: Together, this equates to over 50% of its shares in issue. This means a substantial portion of these shareholders would’ve voted against all these resolutions. So-called retail (private) investors only hold 4% of TFG’s shares. It is almost certain that the PIC as well as one or more of the biggest fund managers, likely Ninety One, voted against these resolutions. The group will enter a closed period from the start of October, before its full-year results which will be released on 6 November. It offered no further details about how, or if, it will engage shareholders over these votes. Areas of growth and decline TFG says it grew group sales by 0.2% in constant currency over the 21 weeks to 22 August, with its Africa unit growing sales by 3.4%. Over that period, clothing and homeware grew by 3.7%, beauty by 12.5% and jewellery by 6.6%, while cellular declined by 5.6%. In Australia, sales were down 4.7%. It says “TFG Australia is currently facing the toughest trading environment, with sales further impacted by the repositioning of the Tarocash brand”. Follow us on our official channels: or create a free account . Free users can leave 4 comments per month. Subscribers can leave unlimited comments via our website and app .

The amended Companies Act making remuneration votes no longer 'non-binding' signals increased shareholder power and potential legal challenges for companies failing to secure sufficient support for executive pay and board appointments. Lawyers and compliance officers should advise boards on enhanced shareholder engagement and governance compliance to mitigate risks and avoid similar public opposition.

Source: Original reporting via Moneyweb