Benguela’s Active Engagement on ESG Massmart Case Study

Massmart and its retail brands are prevalent in every South African’s life. Being one of the largest retailers, it contributed 10% to national retail sales in 2019. Game alone accounts for one in every three TVs sold in the country, it sells one in every three large appliances, and is the seller of the most laptops of all retailers in South Africa.

Yet, this retail giant has destroyed so much value for its Shareholders. Massmart’s share price has fallen 65% over the last five years versus the FTSE/JSE Food & Drug Retail index that has returned 12% over the same period. We, at Benguela, believe a significant contributor to this underperformance has been the historically misaligned remuneration incentive model.

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