“What is important is they must vote. Apparently there’s a meeting on the 5th of August and therefore, that’s the most important thing – shareholders should vote, attend these meetings and engage with management,” Theo Botha told CNBC Africa.

This was after the South African hospitality, leisure, gaming and entertainment group announced that an unsecured loan of 200 million rand would be awarded to five executive directors of Tsogo Sun on an interest-free basis, with no fixed repayment date.

“They must go through the circular, read it, make up their minds [on] whether this is good for the company or not and then engage with management on this issue,” Botha said.

“Five employees have been selected but at the expense of the other Exco members as well as the other 9,000 employees in the company.”

[DATA TSH:Tsogo Sun], which made the announcement on the Johannesburg Stock Exchange’s news service (SENS), stated that the board of directors had recommended that shareholders vote in favour of the resolution authorising the provision of the loan facility.

(READ MORE: SABMiller to dispose of Tsogo Sun shareholding)

The proposition follows the recent announcement by beer and soft drinks business, SABMiller to dispose of its entire share capital in Tsogo Sun.

Botha indicated his surprise at the directors for releasing the news on SENS and suggested that perhaps they believe the current remuneration policy is not adequate enough.

“It seems they feel that management is not getting enough. The other issue is that we’re only awarding five Exco members. If you look at the group Exco committee, there are 14 members. What about those remaining, why aren’t they getting anything,” he queried.

“The last issue is the risk. What if the share price does go down, how will these five people pay back the money to the company?”

Botha also stated that this transaction is slightly different to standard remuneration policy transactions and that it would need to be considered carefully.

(READ MORE: Tsogo Sun’s adjusted HEPS up 18%)

“Remuneration policies are put forward once a year to shareholders and shareholders vote on this but if you look at SENS, this transaction is a share purchase agreement by these five individuals with SA Breweries,” he said.

“These individuals are entering into an agreement with SAB to buy their shares individually, on their own basis. The company is just standing in to support them in terms of lending them money so it’s not part of the remuneration policy yet there’s a cost to the company.”