‘Your employees should all be active shareholders’ – Charles Savage
The Purple Group AGM was held on 8 January 2019 at the organisation’s Joburg HQ. Shareholders packed out the group’s canteen, bringing 62% of the company’s voting rights with them.
Apart from all the financial stuff, resolutions and compliance issues, group CEO Charles Savage also spoke about the important difference between being a shareholder and being an employee. All of the Purple Group’s 70 staff members have shares in the company, along with more than 6 200 other South Africans.
“There’s a very big difference between shareholder engagement and staff engagement,” he explained. “Ninety percent of the people in this room are staff members of the group, and when they come to this meeting they come as shareholders, not as staff. They have a right to information they would otherwise not be privy to.
“Being a shareholder modifies the way you think about the business. It impacts on the way you work and what you do. The level of upliftment is enormous. I can certainly see a radical change in attitude. Shareholders question more and take a keener interest than employees do. They make an effort to understand more about the business because they have a vested financial interest in its success.
“I think it’s an important aspect of the DNA of our group that the asset-base is so broadly held by numbers rather than percentages – and I believe other companies can take some lead from us in this regard. One of the responsibilities of being listed and employing staff is that you should entrust and enable them to be shareholders in your organisation. It will radically transform the ownership structures in a truly meaningful way.”
Over all, the number of shareholders in Purple Group has grown significantly over the past three years – which Charles ascribes to the fact that it’s so easy to buy shares on the EasyEquities platform.
“The benefit of having more shareholders is that we have more fans because, in my opinion, shareholding is the highest form of loyalty. Shareholders are putting their money into our business because they like what we’re doing. If they don’t like it, they sell. It’s as easy and as simple as that.”
The total number of shareholders in Purple Group is 6 310, which is a substantial amount. Charles put that number into perspective:
“When SAB delisted there were around 20 000 shareholders. About 55% of these were foreign investors, which means about 9 000 shareholders were South African. In this context, 6 310 is a significant number.”
And while 6 310 might be a significant number in the grand scheme of things, Charles said there was still loads of potential to sign up more shareholders.
“Our aim is to have all of our 82 000 (soon to be 200 000) clients registered on our platform as shareholders. And not just registered, but active,” he said. “We believe shareholders should attend meetings, ask questions and challenge the directors on their decisions and their thinking. This helps to ensure checks and balances are maintained and that shareholders are kept updated and happy.”
Charles admitted that Purple Group’s value is not reflected in the financials or the share price.
“But we have extraordinary growth potential, given the size of the market,” he said. “We are, in fact, the biggest stock broker by retail numbers in South Africa – and we are just four years old! Some companies have been doing this for a century or more. We compete with the biggest brands and balance sheets in this market in a sector that is highly competitive and we are disrupting them at their own game.”
The next step in growing shareholder value will be taking what the group has done here and doing it in other countries.
“We already have some prospects in place in this regard, with Australia set to be our first international play,” said Charles.
“I’m very proud of what we’re doing despite the share price or the financials. I know we are not a perfect business and I take all criticism on board. I also know that the Purple Group team will work to improve. We won’t get everything right but I can tell you that the DNA of this organisation is built on extraordinary generosity and trust and without those founding principles and the support of our shareholders, we would never be where we are today.”