CORPORATE GOVERNANCE
Remco , in order to ensure market competitiveness . The comparator group comprises of companies with a similar profile to that of the Senwes Group from an investor ’ s perspective .
Non-executive directors ’ fees comprise a fixed fee for board membership , as well as additional fees for board committee participation . The fee for the vice-chairman of the board is based on a percentage of the chairman ’ s fee , which is set at 70 %. The chairmen of board committees are paid a premium commensurate with their role and as compensation for the additional responsibilities as chairmen . Non- executive directors do not participate in either the short-term or longterm incentive schemes . The out-of-pocket expenses of non-executive directors , including travelling and accommodation expenses , are reimbursed monthly after due submission of such claims .
EXECUTIVE DIRECTORS ’ REMUNERATION
The primary objective is to ensure that executive directors receive remuneration which is appropriate to their scale and scope of responsibility and performance and which will attract , motivate and retain individuals of exceptional calibre and behaviour , as well as incentivise them to work in the short-term and long-term interest of the group in line with shareholders ’ interests . The remuneration mix of the executive directors comprises guaranteed pay , short-term and long-term incentives . Total remuneration is weighted towards variable performance-based remuneration . Appropriate benchmarking is done against applicable and selected peer groups .
GUARANTEED REMUNERATION
Remco determines executive directors ’ and other executives ’ total remuneration and reviews it at least annually , using benchmarks based on external surveys and a comparator group of companies .
The benchmarks are verified with independent HR specialist suppliers at the discretion of Remco . Guaranteed pay is positioned at the median of the relevant benchmark . Variations will occur around the median , which will be influenced by various factors , such as the strategic importance of the role , level of experience of the executive , performance record and other considerations that Remco may deem appropriate . A variance around the range of between the 40th and 60th percentile is reasonably competitive and acceptable .
SIGN-ON AND / OR RETENTION BONUS
A sign-on bonus is a once-off monetary award offered to a prospective employee as part of a larger remuneration package and as incentive to join the company . The payment may also be used to relieve the prospective employee of the financial obligations that he / she may have at his / her current employer , which will become due and payable as a result of his / her termination of employment . Such obligation may serve as a disincentive for the prospective employee to leave his / her current employment .
A retention bonus is a financial incentive paid to a key employee , from time to time , to motivate him / her to remain in the employment of the company . It is a strategic tool to manage the flight risk in respect of key employees , potential successors and scarce skills . Remco , at its discretion , determines and approves or recommends to the board a special purpose bonus , applicable conditions and the quantum thereof .
SHORT-TERM INCENTIVES
Short-term incentives ( STI ) are paid in cash and are based on the achievement of annual targets . The STI comprises an on-target bonus and profit share where targets have been exceeded . The criteria to qualify for short-term incentives are based on group corporate financial performance , profit and return targets and individual financial and non-financial strategic and operational performance objectives .
LONG-TERM INCENTIVES
Executive directors and other executives , as well as selected senior managers , participate in an equity-based share incentive scheme , which is used for retention as well as long-term performance incentivisation . Subject to the approval of the board , Remco , at its discretion and based on the recommendation of the CEO , allocates shares to participants on an annual basis . The shares are forfeitable , subject to a vesting period of three years and retention and performance conditions . Performance criteria are based on return on equity and growth on HEPS .
The shares are allocated to a Senwes Share Incentive Trust , which is governed by a board of trustees made up of three Remco-nominated trustees and one nominated by the participants .
The aggregate number of shares which may be granted in terms of the scheme , may not exceed 5 % of the total issued ordinary shares of the company , from time to time , over the duration of the scheme .
The maximum number of shares awarded to any individual participant in respect of all unvested grants in terms of the scheme , shall not exceed 1 % of the issued ordinary shares of the company , over the duration of the scheme , which currently equates to 1,8 million shares . Executive directors already appointed will have fixed-term contracts with possible extension of contracts , but newly appointed executive directors will be appointed on a full-time basis , as determined by Remco and approved by the board in 2018 . Fixed-term contracts must be reviewed six months before the termination date to decide on extension or termination .
DISCRETION AND JUDGEMENT
The remuneration policy recognises that mechanistic and formulaic remuneration practices , whilst providing certainty and predictability , are not always appropriate in all circumstances . Remco and board discretion is important to ensure that remuneration practices and outcomes remain appropriate at all times , including circumstances that are not anticipated by the remuneration policy . This discretion has to be exercised legally , fairly , ethically and justly .
SENWES INTEGRATED REPORT 2020
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