Truworths CEO sells R100m in shares to pay taxman, loans

The CEO of Truworths International, Michael Mark, has in the last two months sold 1.4 million shares in the group in five separate transactions on the market. Mark, who has been CEO of the retailer for 32 years, did not receive any proceeds from the sales. Rather, the shares, worth R102 million, were sold to pay for them (i.e. exercising the options), as well as a hefty tax bill. 

At the end of the financial year (2 July), Truworths said that the loans for these share options held by Mark totalled R43 million. It says this value “represents the price paid, less any repayments made, for shares allotted pursuant to the said scheme”. This suggests Mark’s tax bill for these sales would’ve been around R60 million (possibly less if he was using cash from the sales to settle some of the purchases; in other words – loans weren’t in place for all options).



Astonishingly, the options in question are from a long-term incentive scheme that is 25 years old!

It implemented its 1998 share scheme upon listing on the JSE and made awards under it until 2012. The group says all outstanding options will expire in the 2025 financial year. The shares sold by Mark are from awards made between 2008 and 2010. Truworths noted on 31 October that following the last of the five tranches sold, “the transaction concludes the sale by the director of all vested shares resulting from options awarded to him in terms of the company’s legacy 1998 share scheme”.

The exercise price of these equity-settled awards was R44.78 per share. 

The group emphasises in a summary of the sales in October that “the sale transactions were undertaken solely to settle the purchase price or loans repayable, and the tax due, on vesting together with the transaction costs, so that a material number of the shares that had vested could be retained by the participant”.

“None of the sales was undertaken to rebalance the investment portfolio of the participant, nor resulted in any cash accruing to the participant.”

More shares still in the bag

Still, after the sales, Mark retains over 600 000 shares under this scheme. At current prices, this is worth just under R50 million (Mark’s remaining shares equate to about 44% of those sold in September and October). 

During the last financial year, the ‘benefit’ of the interest-free loans “pursuant to the 1998 share scheme” provided to Mark by the group was quantified as R3.3 million. At the end of the financial year, Truworths said that the shares held by Mark under the 1998 share option scheme were valued at R106 million. 

Since July, Truworths’s share price is up as much as 40%, meaning he would’ve received significantly more in each sale than in July.

The group touched the highest level in the past 52 weeks at the beginning of November.



Its 2023 integrated report shows that, at the beginning of July, Mark held a total of 450 000 options, 1.55 million shares and 911 000 restricted shares with performance conditions. The sales since then – both under the 1998 share scheme and other incentive plans – will see these values decrease. 

Remuneration package

In 2023, Mark was paid a total of R38.259 million, which includes the R3.3 million benefit from the interest-free loans. Chiefly, this comprised base pay of R10.9 million, a short-term cash bonus of R13.25 million and “qualifying dividends” from shares and options held totalling R10.7 million.

An additional R32 million in long-term incentives vested during the year, which the group neatly ‘separates’ from how it discloses so-called ‘single-figure remuneration’ for the year. Most other listed companies include this in this type of calculation. Had these figures been included, Mark’s total remuneration for the year would have been R70 million.  

Mark was set to step down as CEO at its AGM last year, in a plan announced in 2020, but his departure has been delayed. The board maintains it now has a succession plan in place, with CFO Emanuel ‘Mannie’ Cristaudo and Sarah Proudfoot having been appointed joint deputy group CEOs. 

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