Basil Sgourdos isn’t in any danger of having a rocky financial start to the year.
Last week the Naspers CFO cashed in 27,360 share options awarded to him in 2013, netting a little over R74m.
Of course, directors are able to, and should, diversify their earnings, particularly if their wealth is tied to one particular share.
What makes Sgourdos’s action objectionable is that Naspers and Prosus are in the midst of a multibillion-dollar share buyback, which has helped resuscitate the stock after its lows of last year.
It means Sgourdos and his fellow directors, should they exercise options, are guaranteed a chunky payday through no efforts of their own but rather due to the way shareholder funds are being used.
Of course, Naspers’s rally this year is not only due to its buyback programme but also to the reinflation experienced by China’s Tencent, whose stock has soared an eye-watering 54% this year.
It raises the question, again, of whether Naspers’s executives are having any positive effect on the business at all. And if not, do they deserve these colossal paydays?
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