YOU KNOW TIMES are tough when journalists have to take stockbrokers out to lunch. Usually it's the stockbrokers who pay the tab, typically at smart restaurants. Now some are prepared to slum it at more downmarket venues if the journalist is paying.
But full marks to Barnard Jacobs Mellet (BJM) for treating its shareholders and directors in much the same way. Shareholders saw the interim dividend passed last September and the final dividend cut to We/share (compared to total dividends of Sic/share in financial 2008).
Chairman John Bester says in the annual report that the board appeared out of step with the market when it decided not to pay an interim dividend. "Capital retention was prudent." He adds the dividend policy of two times cover remains unchanged but deviated to three times cover due to the current economic climate.
However, directors also felt the pinch. CEO Andile Mazwai refers to the euphemistic sounding "flexible compensation model to effect negative wage inflation". He responded by taking a 4% cut in his package. Okay, it's nowhere near the dividend cut. But he's the boss; complacent remuneration committees have awarded many other bosses of listed companies generous increases.
Notes in the annual report show that overall BJM's directors' salaries dropped from R10,6m to R8,8m between the financial years. Including other benefits, such as share-based payment transactions, the directors' total bill nearly halved to Rll,7m.
On the other hand, employees saw a small increase in salaries, although share payments were also drastically reduced. That can be understood as BJM's main asset - is the "quality of our intellectual capital". There were no retrenchments.
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