The Public Investment Corporation (PIC), Africa’s largest money manager, described as “excessive” a payment made to former MTN Group CEO Sifiso Dabengwa, who resigned after a record Nigerian fine.

“PIC has communicated to MTN management its strong opposition to what we see as gross misuse of shareholder funds,” the fund manager said on Monday. “Management and the board of MTN should be held accountable for actions taken under their watch.”

Mr Dabengwa’s R23.7m payout equated to almost three years’ basic salary and took his total 2015 remuneration to R40.6m, MTN said in the company’s annual report published on Monday.

Michael Ikpoki, the former head of the operator’s Nigeria unit, who also left after Nigerian regulators imposed the $5.2bn penalty, was awarded R17.3m in compensation.

MTN’s share price has declined 25% since the fine — later reduced to $3.9bn — was made public in October.

The PIC, which manages the bulk of the government’s pension fund money, is MTN’s biggest shareholder with a 13% stake in the company, according to data compiled by Bloomberg. It has almost R2-trillion in assets under management.

The two executives were rewarded even after they resigned to take responsibility for the Nigerian penalty, which equates to about three years of MTN’s earnings before interest, taxes, depreciation and amortisation (ebitda) in the country. The penalty was imposed on the company for missing a deadline to disconnect 5.1-million subscribers that the government had deemed to be unregistered in Nigeria, which is tightening security as it battles an Islamist insurgency.

Phuthuma Nhleko, the former CEO who returned as executive chairman to resolve the Nigerian crisis after Mr Dabengwa resigned, was paid R5m for work from November 9 until the end of the year. His contract runs until May 9, indicating a total payout of R17.5m for six months’ work. He may also be due a bonus when his contract expires, according to the annual report. The company expects to name a new CEO by the end of June.

MTN and Mr Nhleko have yet to settle the fine, despite hiring former US attorney-general Eric Holder to represent the company and making a 50-billion naira ($251m) down payment. In March, the wireless operator proposed a $1.5bn package that included cash, government access to its wireless network and an offer to buy Nigerian sovereign debt. While the offer had not been formally rejected, negotiations were not currently under way, Nigerian Communications Minister Adebayo Shittu said on April 20.

MTN shares fell 2.6% to R143.59 on the JSE, its biggest decline in almost three weeks, valuing the company at R265bn.

“I am sure shareholders are not happy to pay out exorbitant golden parachutes to management that were asked to leave because they were incompetent,” said Michael Treherne, a money manager at Vestact, which holds MTN stock.

However, the payout to Mr Dabengwa may be the cheapest option if Mr Nhleko could resolve the fine in MTN’s favour, he said.

Nigeria is the biggest of MTN’s 22 markets across Africa and the Middle East, with about 61-million subscribers.

•Sourced from Bloomberg. Photo shows former MTN Group CEO Sifiso Dabengwa.

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