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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