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Service agreement contract
Executive chairman
Following the sudden and unforeseen resignation of
the Group president and CEO, Sifiso Dabengwa, in
December 2015 the board appointed Phuthuma
Nhleko to fulfil the role of executive chairman under a
special contract arrangement whereby he had to
negotiate and settle the Nigerian regulatory fine
matter in addition to other key operational matters
that had to be resolved on an urgent basis. This was
the very best option to put in place uniquely
experienced leadership for MTN until such time as a
new CEO could start. The initial agreement was for
six months, but this was subsequently extended to
run until Rob Shuter was able to join as CEO. Mr
Nhleko was asked to work to stabilise the company in
light of the departure of the previous CEO and the
Nigerian fine. He personally undertook the leadership
of many critical areas of work including:
•
Negotiating the R34 billion reduction of the Nigeria
fine, payable over three years, and re-establishing
a constructive working relationshipwith the Nigerian
authorities;
•
Restructuring the balance sheet, including securing
long-term facilities and raising a US$1 billion bond;
(see
AFS
)
•
Undertaking a fundamental review of the operating
and governance structure, including refreshing
senior management and securing new appointees
in critical positions, and securing three new
independent board directors with complimentary
experience;
•
Implementing a new R9,9 billion empowerment
scheme, MTN Zakhele Futhi;
•
Repatriating funds from Iran (see
24); and
•
Instituting the IGNITE programme, the roadmap for
accelerated performance.
In order to take on this full-time executive role at short
notice, Mr Nhleko was required to commit 100% to
the MTN task and step away for 16 months from all
his considerable other various commercial interests.
In recognition of the unprecedented circumstances
surrounding his appointment to the position of
executive chairman, of the level of commitment
involved and in consideration of the uniqueness of
his experience for the role, the board negotiated an
appropriate monthly fee and performance-related
cash bonus contract with him on the deliverables.
To enlist the services of Mr Nhleko, the board entered
into a contract of employment with a service provider,
Captrust Investments Proprietary Limited.
In consideration for Mr Nhleko’s services, the
Company paid an agreed-upon service fee to the
service provider (see
87). His contract further
stipulates that the board, at its discretion at the end
of the contract, may award him with an ex gratia fee
depending on what was achieved.
In addition to this fixed-term contract as an executive,
Mr Nhleko continued to serve as chairman of the
MTN Group Limited board of directors, and as such
received all related director remuneration in this
regard. Full details of remuneration paid to him in his
capacity as director are provided on
86.
Employment contracts
Group president and CEO
(executive director)
The appointment of the new Group president and
CEO, Rob Shuter, was effective from 1 July 2017,
however, he started working on 13 March 2017. His
appointment is for a four-year fixed duration to
12 March 2021. He has a notice period of six months
and a restraint of trade of 12 months.
Chief financial officer (executive director)
The chief financial officer, Brett Goschen, was
employed on a five-year fixed-term contract until
August 2018. However, Mr Goschen resigned,
effective 30 September 2016. Full details of
remuneration paid to him in his capacity as director
are provided on
The appointment of the new CFO, Ralph Mupita, is
effective 3 April 2017 and is of no fixed duration. He
has a notice period of six months and a restraint of
trade of 12 months.
Prescribed officers
Other prescribed officers of the Company are
employed on a full-time and permanent basis with no
fixed termination date applicable, with the exception
of the Group COO, Jens Schulte-Bockum, who is
employed for a limited duration period terminating on
15 January 2021. His employment commenced on
16 January 2017.
MTN Group Limited
Integrated Report 2016
85
GOVERNANCE,
PEOPLE AND
REMUNERATION