Corporate Governance
Investments
management rewarded when they add value. So, we have seen teams rewarded for doing things like maintaining loan-to- value (LTV) ratios at certain levels, but this should be part of their everyday role. Rather execs should be rewarded for incentivising per share value creation over absolute growth,” he says. “We want to see remuneration schemes where targets are disclosed and externally observable. We must be able to measure the metrics and ideally avoid the inclusion of ‘soft’ metrics which can be subject to subjectivity rather than objectivity,” he says. Mowlana says that as the listed sector develops and matures, he wants to see more people with property experience joining property company boards. “Improved transparency as well as fierce independence at a board level will improve the sector,” he says.
While some shareholders are still counting their capital losses since the end of 2017, some management teams are earning record salaries that are, in some instances, more than double what they were receiving in 2017. “Remuneration committees should contemplate introducing high-water marks when issuing shares to management, either in terms of the price at which the shares are issued or the metrics required to achieve before shares can vest. That would more closely align the financial benefits or risks of management and shareholders,” says Anderson. Mowlana says boards should consider the granting of discretionary awards to directors very carefully. “Shareholders don’t have many levers to pull when they want to effect change at a company. One of the levers, however, is voting on remuneration. We want to see
Remuneration committees should contemplate introducing high-water marks when issuing shares to management.
Irina Grigore
Werner Behrens
below 90% having been at 100% in 2017,” he says. He says execs’ pay and rewards must not grow disproportionately to shareholder returns. “The big pay increases are at Fortress and Vukile, where CEOs Steven Brown and Laurence Rapp are reaping the benefits of conditional share plan awards issued during the Covid lows that are now vesting. While both CEOs should be commended for the successes they’ve achieved at their respective companies, the recent total compensation paid to both is pretty eye- watering, up 163% since 2017 at Fortress and up 148% at Vukile,” he says. Anderson says management teams are benefiting from the rerating in share prices since the pandemic lows when they were awarded shares at historically low levels. “The massive upside they’re enjoying is more a function of the market rerating than actual net asset value accretion. This is likely to continue for the next year or two. Shareholders also remember that several of these share plans in which management was supposed to be 100% exposed to market risk were repriced or cancelled to ensure management teams didn’t suffer the same catastrophic capital losses that their shareholders experienced. That wasn’t the case across the board but if just one or two companies do it, it taints the sector,” he says.
Werner Behrens then replaced Wilken at MAS in the middle of 2019. He however didn’t last long in his role. He said in August 2019 that MAS would build a new team to manage its East European assets instead of relying on Prime Kapital. It would also buy assets directly in Central and Eastern Europe. This was while continuing with its development relationship with Prime Kapital, he said. But then Co-Founder and Managing Partner of Prime Kapital and chairman of MAS at the time, Slabbert took over the reins at MAS in November 2019. He later stepped down from his CEO role and was replaced by current CEO, Irina Grigore on April 21, 2022. Remuneration policies Anderson says that meanwhile many property companies have improved governance in recent years. He says a key aspect of this is in terms of remuneration policies. “On executive remuneration, Growthpoint Properties and Redefine Properties have seen very moderate increases in CEO pay, actually less than inflation, for example,” he says. “But their dividends are down 37% and 43% respectively since 2017, while NAV per share is down 21% and 23% over that same period. Dividends are down more because dividend payout ratios are now
October 2025 | Issue 141 | Asset Magazine 275
274 Asset Magazine | Issue 141 | October 2025
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