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Old Mutual is staying mum on its reasons for suspending its chief executive Peter Moyo on Friday. The insurance company cited a “material breakdown in trust” but said it would provide more information at its annual general meeting.
The company made the announcement just hours before the annual shareholder meeting of South Africa’s No.2 insurer, knocking its shares.
* Shares in South Africa’s No.2 insurer fell 5%
* Suspension follows “breakdown in trust”
* Investor says lack of detail fuels speculation
Old Mutual is staying mum on its reasons for suspending its chief executive Peter Moyo on Friday. The insurance company cited a “material breakdown in trust” but said it would provide more information at its annual general meeting.
The company made the announcement just hours before the annual shareholder meeting of South Africa’s No.2 insurer, knocking its shares.
Moyo, who took the helm at newly-listed Old Mutual less than a year ago, would be replaced by chief operating officer Iain Williamson as acting CEO immediately, the insurer said.
“The board has had various engagements with Mr Peter Moyo ... These engagements have caused the board to conclude that there has been a material breakdown in trust and confidence between him and the board,” Old Mutual said in a statement.
Moyo, who has held senior executive or board positions in a variety of firms and served as a deputy managing director in a previous stint at Cape Town-based Old Mutual, did not immediately respond to requests for comment via LinkedIn and email.
He rejoined Old Mutual in 2017, initially as head of the emerging markets division, before the former conglomerate’s main African financial services business was split off in a disentanglement of the 173-year-old group’s structure.
A spokesperson said that chairperson Trevor Manuel, a businessman and former South African finance minister, would provide more information at Old Mutual’s Annual General Meeting.
Both Old Mutual’s Johannesburg and London-listed shares dropped 5% on news of Moyo’s suspension, but recovered to R21.53 a share by 9.25, a 0.78% decline.
Since its listing as a separate business in June 2018, Old Mutual has been working to hone its strategy as a stand-alone business and parent company to what remains of Old Mutual Plc.
Old Mutual announced a R2 billion share buyback in March in a bid to placate shareholders following an almost one-third drop in the share price since the listing.
Traders and investors were left guessing by the move.
“Given the very little information in the announcement, it leaves room for speculation,” Jan Meintjes, portfolio manager at Old Mutual investor Denker Capital, said.
In 2018, Moyo earned a total of R35.5 million. It was during this time that the group completed its managed separation and listed its African and emerging markets arm on the JSE.
Moyo’s reward highlighted his ability to deliver the successful listing of Old Mutual, the company said in its integrated report.
His pay included a fixed income of R8 million and a cash short-term incentive of R7.1 million, among other benefits. The company said executive remuneration structures were “heavily weighted towards performance-based remuneration” and benchmarked against industry standards.
The total came to R35 565 588. – Reuters
