Counter trails most rivals in the gold index, but Bernard Swanepoel is no laggard when it comes to his peers
Harmony bosses rake it in, even as share price wilts
September 29, 2003
By Bloomberg
Johannesburg - Bernard Swanepoel, the chief executive of Harmony Gold Mining, increased his compensation last year by 35 percent while his company's share price fell by almost a third.
Swanepoel earned R12.47 million in salary, bonus, pension contributions and profit on exercised share options, Harmony, the world's fifth-biggest gold producer, said in its annual report for the year to June 30.
Harmony's net income for the year fell 62 percent to R639 million and its share price was the second worst performer on the eight-member FTSE/JSE Africa gold mining index, declining 31 percent.
The rand rose 38 percent against the dollar during the year, cutting the benefit from a 10 percent increase in gold prices. Most costs are paid in rands, while the metal is sold in dollars.
Excluding share options, Swanepoel's pay compares with the R5.79 million earned by Ian Cockerill, the chief executive of the larger mining company Gold Fields, and the R6.29 million paid to Bobby Godsell, the chief executive of AngloGold.
The bonuses followed a record profit in fiscal 2002.
Ted Grobicki, an executive director at Harmony, more than quadrupled his pay to R15.13 million, including a profit of R11.2 million on exercised share options. He did not exercise any options last year.
Frank Abbott, Harmony's finance director, boosted his pay by 37 percent to R8.63 million, while marketing director Ferdi Dippenaar earned R6.81 million, an increase of 16 percent.
Bloomberg also reports that Harmony Gold Mining might sell its stakes in Highland Gold Mining and High River Gold Mines by June 30 next year unless it can gain control or "significant" influence in the companies.
Harmony said in its annual report it might sell the stakes because of South Africa's foreign exchange regulations.
Harmony owns 32.5 percent of Highland Gold, worth $156 million, and 17 percent of High River, worth $29 million.
"We may be required by South African exchange control rules" to sell the holdings, Swanepoel said in the report.
London-listed Highland Gold owns Mnogovershinoe, Russia's fourth-biggest gold mine.
Toronto-based High River owns assets in Russia, Canada and Burkina Faso.
Harmony closed R4.80 down at R105.25 on Friday, after a session in which Reuters said the gold index lost 4.8 percent.
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