Sasol directors agree to fee cut


Sasol directors agree to fee cut

Published Date: 2020-11-19 | Source: Stephen Gunnion | Author: Stephen Gunnion

Sasol directors agree to fee cut

The energy and chemicals group acknowledges the erosion of shareholder value over the past two years.

Sasol's board has agreed to cut the proposed fees for its non-executive directors (NEDs) by 20% due to the challenges the company still faces and the erosion of value for shareholders over the past two years.

Ahead of its annual general meeting tomorrow, the company said the proposal that would be put forward to shareholders replaced an earlier special resolution that kept fees unchanged at the level approved by shareholders at its 2018 AGM. The fee sacrifice would remain in place until next year.

Sasol's shares have slumped by about 74% over the past two years, partly due to delays and cost overruns at its Lake Charles Chemicals Project (LCCP) in the US. The weaker oil price and Covid-19 have also weighed on its recent performance, with the company reporting a loss for the year to end-June after it impaired the value of its operations. Last year, it replaced joint CEOs Bongani Nqwababa and Stephen Cornell as it tried to restore confidence due to the issues at Lake Charles. That followed an independent review, which partly blamed governance shortcomings and incompetence in the previous leadership of the US project for failing to identify the issues that led to the overruns.

On Monday, the company said the last unit at LCCP had finally reached beneficial operation after it was damaged in a fire during commissioning in January. The Low Density Polyethylene Unit (LDPU) is one of the three LCCP plants that will form part of a joint venture with LyondellBasell Industries. Last month, it announced a deal to sell a 50% interest in the base chemicals operations at Lake Charles to LyondellBasell for $2 billion to reduce debt and enhance the benefits it gets from its investment. The deal excludes its US performance chemicals business as well as its legacy base chemicals operations in that country.

Shareholders will also be asked to approve the transaction at tomorrow's meeting.

Its shares rose 4.4% to R118 yesterday, assisted by a higher oil price and a weaker rand.

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