31-07-2025
After the Bell: How much is a business idea worth?
This may be an unpopular view, but I'm not convinced one person should get billions for one simple insight that would probably have been implemented anyway.
Through all of the years I have been lucky enough to be a journalist, there is one fundamental dynamic that has become completely entrenched in our society, and most others.
It is that the rich are getting richer while the poor are falling further and further behind.
One of the big drivers of this seems to be the way in which salaries for CEOs have really increased in the past few years.
Now, I fully expect and understand that someone who is able to create value for themselves and others should be paid well. And I do mean really well. It seems entirely moral to me that people should be paid for doing constructive things.
I do wonder though about cases that really involve a rise in technology, or just one insight.
So, Mark Zuckerberg has literally created an industry. But he did this as part of technological changes in society. He would not have been able to do it without being American, being at Harvard, and being there when he was.
Something similar must have happened in 2022 when soaring platinum prices resulted in the CEO of Sibanye-Stillwater, Neal Froneman, getting paid about R300-million.
Now, I could never do what Froneman does. He has a rare combination of skills and the ability to lead a group of people to enable others to make money.
And, of course, much of his salary was in the form of shares, their value increased in line with platinum prices immediately after the Covid pandemic.
This means that this money was not paid out directly by the company, but was the result of the increase in the value of shares he had been given before the rally.
The case of The Foschini Group CEO Anthony Thunström is an interesting example.
In 2024, he was paid 43% less than the year before because the group missed certain targets. This year, he was paid R45-million because he hit those targets.
While he cannot control all of the variables around him, there is something about this that seems intrinsically fairer to me than Froneman's situation, where he benefited hugely from a historic dynamic that lifted platinum prices.
That said, he could argue, perhaps, that only he could have ensured his company was able to take such full advantage of that increase.
I was thinking about all of this watching the Constitutional Court's ruling in the Nkosana Makate case against Vodacom.
He and Vodacom have been arguing for nearly 20 years over how much the network should be paying him for his insight that it should start a 'Please Call Me' service.
I really thought today would be the day this case would finally end. I mean, really, how long can one case drag on?
Instead, all of the judges found the Supreme Court of Appeal (SCA) had got the case hopelessly wrong. But, being on the Constitutional Court, they also felt they should not have to sift through the arguments and the maths.
Now the SCA must do it again, with a new Bench of judges.
For me, at the heart of it is: How much can one idea be worth?
I can see that, for Zuckerberg, perhaps that idea could be worth a huge amount – he did create something that changed the world.
For Elon Musk, perhaps his ideas – around electric cars, rockets and goodness knows what else – will literally save the planet.
That must be worth quite a lot.
But like Musk and Zuckerberg and Froneman, there are other forces at work in the Makate case.
Obviously on the one side is Vodacom, one of our biggest companies with huge resources. It will fight for many years to prevent having to pay out any amounts that go into the billions.
While it can appear as if Makate is on his own, in fact at least part of his campaign has been financed through contingency fees with law firms and, during at least one stage, other groups.
This means that both sides will fight forever. The stakes are that high.
This may be an unpopular view, but I'm not convinced one person should get billions for one simple insight that would probably have been implemented anyway.
It's true that the Please Call Me service is now old hat, but at the time it was revolutionary.
But it was one simple insight into a technology that was evolving very quickly. And MTN already had their own Please Call Me service up and running before Vodacom was able to implement theirs.
Should he receive compensation? Sure. Millions? Maybe. Billions? Surely not.
Of course, no matter how rich or comfortable we may be, we all have our own financial hopes and dreams.
Some of us just want to pay off our bond. Or our kids' school fees.
These are all legitimate. And that's why our demands to be properly paid are also entirely legitimate.
Even if your first name is Elon, and you are hoping and dreaming of going to Mars. DM
