Nicola Mawson|Published
Sygnia founder and chief executive Magda Wierzycka has raised the possibility of leaving the JSE-listed asset manager, which has a market capitalisation of over R5 billion, as shareholders prepare to vote on a controversial employee share incentive scheme valued at approximately R600 million.
The JSE-listed company has called a general meeting for Friday, 23 October, to approve changes to its share option scheme, including increasing the number of shares available to employees and executives from 15 million to 25 million.
According to a report published by Daily Investor on Tuesday, the expanded scheme would make shares worth approximately R600 million available to qualifying employees and executives at an exercise price of just 1c per share.
The proposed changes have attracted opposition from some shareholders, who argue that the scheme could enrich executives at the expense of minority investors. However, Wierzycka maintains that the changes are necessary to retain senior employees, attract new executives and prepare the company for her eventual succession.
Some history
Wierzycka founded Sygnia in 2006 following a management buyout, and stepped down as chief executive in 2021 before returning to the role. Under her leadership, the company has grown to over R460 billion in assets under management.
Speaking to Alec Hogg in a BizNews interview published on 16 October, Wierzycka indicates that the outcome of the shareholder vote could influence whether she remains at the company.
Wierzycka stresses that she is not threatening to resign automatically if the proposal is rejected, but says she would have to consider what the result means for her position. “It’s not a threat. I mean, it’s just I’m putting it out there,” she BusinessTech records her as saying.
A 30-day notice period and the absence of a restraint-of-trade agreement would allow her to establish a competing business, Wierzycka says. “People always go and say, ‘Yeah, she’s bluffing.’ I don’t bluff,” she BusinessTech reports.
Worried
The dispute follows reporting by the Financial Mail earlier this month that several shareholders, including Wierzycka’s former business partner Andre Crawford-Brunt, intend to oppose the proposed changes.
The publication reports concerns about the potential dilution of existing shareholders and the absence of mandatory performance conditions for some awards.
Daily Investor reports that 6,999,500 shares have already been awarded under the existing scheme, leaving approximately 18 million shares available for future allocation if the proposed increase is approved.
The amendments would also increase the maximum annual allocation to an individual employee to 1.5 million shares, subject to an overall limit of 7.5 million shares per person. Awards exceeding five million shares would require performance conditions determined by the board.
Sygnia argues that the changes are needed to compete for experienced executives.
Battles
Wierzycka tells BizNews that the company has struggled to recruit a chief financial officer and that its existing incentive arrangements are insufficient to attract a suitable candidate without substantial additional costs.
At the same time, Wierzycka argues that the business needs a remuneration structure capable of attracting a successor chief executive.
Wierzycka acknowledges that she would personally benefit from the expanded scheme, but rejects suggestions that it is designed primarily to enrich her.
Daily Investor reports that she holds approximately 43% of Sygnia directly and indirectly, while her former husband, Simon Peile, owns about 17%. Wierzycka indicates that Peile supports the proposed changes.
Beyond Sygnia, she is exploring an investment venture offering exposure to privately held international technology companies, including OpenAI, Anthropic and SpaceX.
Wierzycka tells BizNews that the venture could operate within Sygnia or independently. “The saddest thing to me is that I can make more money out of that than I’ve made out of Sygnia over 20 years,” she says.
Sygnia’s shareholder circular was distributed on 25 September, according to an announcement published through the JSE’s Stock Exchange News Service. The general meeting is scheduled for 10am on Friday at the company’s Cape Town head office, with the voting results expected to be released through SENS later that day.
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