.jpg)
Natura & Co, a Brazilian cosmetics maker, is taking steps to restore investor confidence by cutting executive pay by a third. The board of the Sao Paulo-based company has suggested setting the remuneration of senior managers at approximately $15m for the 12 months starting in May. This is a significant decrease from the $20m proposed a year earlier. The proposal will be voted on during a general shareholder meeting on April 26th.
The decision to cut executive pay is part of a wider overhaul aimed at reviving Natura's global expansion ambitions, which have been hit by inflation and supply chain disruptions. Last year, the company appointed Fabio Barbosa as its CEO to address these challenges. The company is also contemplating selling all or part of its high-end brand, Aesop, in a bid to boost profitability.
Natura's shares are still down 77% since their peak in 2021, with a market value of around $3.3bn. The proposed changes have been welcomed by Citigroup Inc. analyst Joao Pedro Soares, who wrote in a note that the cuts were significant and in line with Natura's goal of improving corporate governance.
Alongside the pay cuts, Natura is also seeking to shrink its board, with Barbosa and four other members resigning from their seats. Equity-fund manager, Bruno Rocha, is being considered for one of the vacant positions. Rocha is the founding partner of Natura's largest minority shareholder, Dynamo Administracao de Recursos Ltda.
The decision to cut executive pay is a bold move by Natura, but it could pay off in the long run. By addressing concerns about corporate governance and profitability, Natura could regain investor confidence and see a resurgence in its share price.
