Net1, parent company of social grant payment provider Cash Paymaster Services (CPS), will pay its controversial CEO Serge Belamant at least R263 million — in cash — because he agreed to give up the job a year early.
Then, from this Wednesday, the company will pay him a salary of some R660 000 per month to work for at most a half-day for up to two more years.
The company has also promised to continue to sing Belamant’s praises after he leaves.
These are the terms of a “separation agreement” with Belamant the company filed with the American Securities and Exchange Commission (SEC) on Tuesday evening South African time.
The filing came only hours after Net1 told the Constitutional Court that it had achieved a R1.1-billion profit in paying out social grants on behalf of the government over the last five years.
The company told the US regulator that it would pay Belamant $1-million in recognition of his 27 years with the company, and another $7-million “as an additional amount in part for Mr. Belamant’s cooperative resignation”. It would also accelerate the vesting of share options and purchase all his shares at a price of $10.80 each, at a cost of just under $11 million.
Net1 shares were trading at $9.46 at the time of the announcement, putting the price the company offered Belamant at a premium of a little over 14%.
In rand terms, the minimum payment due to Belamant would be almost exactly R263 million, at Tuesday’s exchange rate.
Belamant had been due to retire next year. But under a two-year consulting agreement, Net1 said, he would be paid $50 000 per month, the equivalent of R651 000 per month.
In return for that payment Belamant himself “will determine the method, details and means of performing” his duties. “The company shall have no right to, and shall not, control the manner or determine the method of performing the services in no event shall [Belamant] be required to provide services in excess of 20 days/hours per month/week,” their agreement reads.
That equates to a four-hour workday, five days a week.
In a non-financial clause to the various agreements, Net1 has promised to make its best efforts to recognise Belamant as the company’s founder and the inventor of its basic technology platform “in all public announcements, marketing or other materials describing the Company’s history, and press releases, as well as on the company’s website”.