Mark Wellesley-Wood, Metallon Gold
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Wellesley-Wood scores on DRDGOLD's asset sale
Gugulakhe Masango
Posted: Fri, 19 Oct 2007

[miningmx.com] -- DRDGOLD HAS perennially attracted the interest of South Africa's remuneration hawks for its unique executive pay regime - particularly that of Mark Wellesley-Wood, its former CEO.

Wellesley-Wood was paid a total of R8,1m in the 2007 financial year, according to the gold company's annual report. That was lower than the R10,1m package he received in the previous year - but his last payout still contained a R3,7m bonus.

High salaries for experienced CEOs are accepted practice as, in the mining sector, the business is set against global competitors. But it's the bonus that has some people worried with regard to DRDGOLD's governance.
the award of bonuses
Over the period for which Wellesley-Wood received his bonus, the firm was in danger of losing its Nasdaq listing because its share price dropped below US$1/share.

The company was also forced to sell its Australasian assets in order to service debt.

However, company spokesman James Duncan says its 2008 financial year will reflect a different approach to executive pay.

"Going forward, executive bonuses and performance-related payments will be paid according to a key performance indicator (KPI) formula," says Duncan.

"The remuneration committee of the company's board - comprising non-executive directors - will determine the award of bonuses and performance-related payments in terms of individual directors' attainment of their particular KPIs."

But what of the bonus Wellesley-Wood received last year?

According to company insiders that was paid because of the break-up of the Australasian assets, a bit of corporate activity for which Wellesley-Wood is paid in line with his employment conditions.

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It doesn't seem to matter that the sale was brought about by the company's financial troubles.

In total, Wellesley-Wood's last package - his contract wasn't renewed for the 2008 financial year - consisted of a R2,5m salary, a R3,7m bonus and a R1,9m end of contract payment.

John Sayers, newly appointed CEO of DRDGOLD, received a total remuneration of R3,4m, consisting of a R2,8m salary and a R562 500 bonus.

Writing in the company's recently published annual report, DRDGOLD chairman Geoffrey Campbell said: "It has been a tough year. With the company concentrating on South Africa we are confident that we can achieve the necessary operational stability to ensure that our underground mines are consistently cash-flow positive.

"We are focused on South Africa."