Old Mutual’s new chief executive, Jurie Strydom, could earn a R300m incentive if he succeeds in lifting the insurer’s share price to ambitious targets over the next four years, placing executive pay firmly at the centre of the group’s turnaround strategy. The incentive, approved by the board, is linked directly to closing the gap between Old Mutual’s market value and its underlying assets, a gap that has frustrated shareholders for years.
Since Strydom took over in May 2025, Old Mutual shares have risen by more than 30%, trading at about R15.08 this week. While the rally has boosted confidence, the share price remains well below the R21.74 level required by May 2030 for the full incentive to vest. According to Business Day, the payout structure is designed to align management decisions with long-term shareholder returns rather than short-term gains.
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Despite the recent rise, Old Mutual’s market capitalisation of roughly R70bn remains far smaller than that of its main local rival, Sanlam, which is valued at about R213bn and has seen its shares gain 18% over the same six-month period. This contrast highlights the scale of the challenge facing Strydom as he attempts to reposition the 180-year-old group in a competitive financial services market.
The company’s revised strategy, presented to investors in late 2025, focuses on tighter cost control, improved operational discipline and more selective use of capital. Management has set a target to cut costs by around R2.5bn by 2027, while also improving margins in its insurance and investment businesses. As reported by Reuters, investors have responded positively to clearer execution plans and more conservative growth assumptions.
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Old Mutual’s board has acknowledged that the group’s share price has underperformed since 2018, when it unbundled Nedbank. At the end of September, the group’s equity value stood at R86.7bn, implying a value per share well above the market price at the time. This persistent discount has reinforced the case for linking executive rewards to share price recovery.
Strong cash generation has added to the investment case. The group has produced R27.6bn in cash since the 2022 financial year, suggesting that parts of the business are undervalued. According to IATA industry data, diversified insurers with banking and asset management arms have increasingly relied on cross-selling and digital platforms to unlock value, a trend Old Mutual is now following more closely.
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A key test of the strategy will be OM Bank, Old Mutual’s new banking offering aimed at customers earning between R8,000 and R80,000 a month. The bank enters a crowded market where competition is intense and margins are thin. Success here could help justify the R300m incentive; failure would leave the valuation gap, and the payout, out of reach.