Foschini sweetens Murray's stay as chief with share offer

Doug Murray.

Picture: Financial Mail

The group awarded Murray 142,900 shares last week, as part of an agreement to extend his tenure until at least the completion of the 2018 financial year.

The value of the transaction is about R21m.

TFG’s head of marketing and e-commerce, Kathryn Sakalis, said the board had agreed it would be in the best interest of the company and its shareholders for Murray to lengthen his term to ensure the completion of "strategic initiatives", as well as to enable a smooth transition for his successor.

Sakalis said it did not mean the company had no succession plan. "TFG has had a well-entrenched development and succession strategy in place for many years, and for all senior positions including, but not limited, to that of the CEO.

"This strategy is informed by our recognition of the critical impact quality leadership has on a company, and our responsibility towards our shareholders."

Sakalis said the group gave employees opportunities to learn skills throughout their careers.

"This is key to our succession plans, so as to prepare leaders sufficiently for future senior roles. For reasons of confidentiality, we are not in a position to divulge specific details about our leadership strategy or individuals concerned," said Sakalis.

Murray had been with TFG for 22 years before he was appointed to the role of CEO in 2008. He succeeded Dennis Polak, who had led the group for 10 years.

Sakalis said TFG’s succession plan would ensure an effective and deliberate handover that would "preserve and build on the value, momentum and success that Doug and his executive team have achieved".

Meanwhile, rival Truworths is also sticking with long-serving CEO Michael Mark.

Late in 2014, it appointed Frenchman Jean-Christophe Garbino as CEO-designate.

Garbino was to take over from Mark, who had been CEO for 23 years. But Garbino, who is considered a veteran in the business, resigned in December 2015 amid intense speculation.

It was announced that Mark would resume the duties of CEO until the end of 2017.

Conditions in the retail sector are expected to remain challenging for the foreseeable future.

Interest rates are set to continue rising, while SA’s economic growth prospects are unlikely to improve in the short term.

TFG’s share price has risen more than 16% year to date. At the close of the JSE on Monday, TFG’s share price had dropped 0.88% to R142.73, valuing the company at about R31bn.