The Merger:
The merger between
The merger between the two companies was announced back in
The merger also brought significant changes in the combined group corporate governance structure, including, adopting a 2-tier board structure that comprises of an Executive Board and Supervisory Board. The 2-tier structure is a common practice laid out by the Dutch Corporate Governance code.
Additionally, change was announced to both the Supervisory and Executive board with the intention to increase the presence of both companies involved in the newly formed entity. The Supervisory Board increased from four to seven members with four members coming from Just Eat and the three from
On the Executive Board, the Co-Founder and CEO of
The intended rearrangement was said to foster "a strong founder-led management team with years of combined experience in the sector". 1
CGLytics presented a scenario analysis of the board composition on the date of the announcement and what the board is comprised of before and after the merger.
Takeaway.com's Board Expertise and Skill Matrix (pre-merger)
Source: CGLytics Data and Analytics
Just Eat Takeaway Board Expertise and Skill Matrix (post-merger)
Source: CGLytics Data and Analytics
In the post-merger analysis, there is improvement to the overall board structure. Governance expertise are increased as well as Financial expertise, which are core competencies and imperative to a board. In a market with tough competition, that includes big names such as
The analysis also reveals that the company is lacking in Technology expertise. For a company that carries out most of its business online, it should be an expertise area worth considering to improve.
As much as the merger seemed a good fit for both companies involved, South African owned
Nonetheless,
At the beginning of 2020, rumours started circulating that a deal had been met;
The Acquisitions:
Within the past year
In 2019 the company won the battle with
In 2020, after nearly a month of negotiations, US based
Just Eat Takeaway shareholders will control around 70 per cent of the combined company, while the rest will be owned by
"Would it be better to just wait one year after every transaction? Yes, sure. We'd get more sleep. But that's just not how the world turns" 4
Impact on CEO Compensation:
During the company's 2020 Annual General Meeting (AGM), shareholders agreed to significantly increase the bonuses of the CEO and Executive Board. Where it was absent prior, there will be a Short-Term Bonus (STI) of a maximum of 150 percent of the base salary and an on target of 75 percent of basic salary.
In addition, there has been an adjustment to the Long-Term Incentive (LTI). The LTI has increased from a maximum of 150 percent to a maximum of 200 percent of the base salary and will be paid in the form of performance shares rather than performance stock options. The pay is, of course, dependent upon the achievement of performance objectives such as revenue growth relative TSR and a strategic target. [5]
The below table provides an example of what the potential earnings for the CEO might look like if all performance objectives are met versus what was earnt over the past two years.
Source: CGLytics Data and Analytics
The company argued that the adjustment is to align the remuneration policy with the current size, scope and complexity of the company following the merger with Just Eat. Shareholders seem to agree to the proposal, which earned a resounding 99.2 percent approval at the 2020 AGM.
Footnotes
1. https://www.just-eat.com/protected_file/683
2. https://naspersstorageaccount.blob.core.windows.net/prodnaspersmedia/prosus/media/prosus/pdf/investors-announcement/increased-offer-announcement-dated-9-december-2019.pdf
3. https://www.ft.com/content/01d77b0c-1a58-11ea-97df-cc63de1d73f4
4. https://www.ft.com/content/58c0f467-3510-41c6-8155-a4072e6e3575
5. https://corporate.takeaway.com/investors/general-meeting/
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