The remuneration report provides an overview and understanding of Remgro\u2019s remuneration principles, policy and practices with specific reference to executive and non-executive directors and members of the Management Board. The information provided in this report has been approved by the Board on recommendation by the Remuneration and Nomination Committee.<\/p>\n
The functioning of this dedicated Board committee is well established within Remgro\u2019s mode of operation. In essence it is the committee\u2019s role to ensure that directors and executives are remunerated fairly and responsibly and that the disclosure of directors\u2019 remuneration is accurate, complete and transparent.<\/p>\n
The committee is governed by a mandate that incorporates the recommendations of King III and serves to assist members of this committee in the execution of their role and responsibilities.<\/p>\n
The members of the committee for the year under review were:<\/p>\n
The Board acknowledges the principle in King III that the Chairman of the Board should not be the chairman of the Remuneration and Nomination Committee but, given the necessity to align the Company\u2019s remuneration approach with corporate strategy, this arrangement is deemed appropriate.<\/p>\n
The committee met twice during the year and details on the attendance of the meetings are set out in the Corporate Governance Report here<\/A>.<\/p>\n The terms of reference set out in the mandate of the committee include the following:<\/p>\n In respect of its nomination function \u2013<\/p>\n In respect of its remuneration function \u2013<\/p>\n The committee is satisfied that it has carried out its responsi\u00adbilities for the year in compliance with its mandate.<\/p>\n <\/a><\/p>\n Remgro has a Remuneration Policy for directors and members of the Management Board. The remuneration policy is aligned with the Company\u2019s approach of rewarding directors and senior executives fairly and competitively, according to their capabilities, skills, responsibilities and level of performance. It aims at supporting the Company\u2019s remuneration principles of:<\/p>\n It should be noted that, as in the past, the Board will not ask shareholders for non-binding approval of the Company\u2019s remuneration policy at the Annual General Meeting on 23 November 2015.<\/p>\n These employees are rewarded by means of a two-tier approach in Remgro\u2019s remuneration structures which entails:<\/p>\n This element, referred to as total guaranteed package, consists of components such as salary, cash or car allowance and the Company\u2019s contributions towards retirement funding and the medical aid scheme.<\/p>\n As part of the annual review process by the Remuneration and Nomination Committee (the committee), guaranteed packages are benchmarked against the upper quartile of the market for comparable companies as indicated per independent survey(s). The services of an independent remuneration consultancy are contracted for this purpose.<\/p>\n The annual review is based on the executive\u2019s level of responsibility, his\/her overall performance and the achieve\u00adment of specific agreed objectives. The CEO, who attends all committee meetings by invitation, can propose increases to the guaranteed packages, excluding his own, during such review meetings.<\/p>\n During the year under review, the executive directors and members of the Management Board received an average salary increase of 11.7% (2014: 7.5%), compared to an average salary in\u00adcrease paid to general staff of 7.1% (2014: 7.1%). The main reason for the higher average increases awarded to executive directors and members of the Management Board compared to that of the general staff in 2014, was the once-off adjustment to the guaranteed package of Mr Jannie Durand in order to adjust his package to a market-related level.<\/p>\n It is important to note that, due to the nature of the Company\u2019s operation as an investment holding company and in order to align the interests of management with those of shareholders, no short-term incentives are paid to executives.<\/p>\n Remgro currently has one long-term incentive plan, i.e. the Remgro Equity Settled Share Appreciation Right Scheme (the SAR Scheme). The SAR Scheme is an equity settled scheme and has the aim of retaining the services of executives by incentivising them based on long-term growth in the market capitalisation of the Company. This approach ensures alignment between personal wealth creation and corporate strategy. All permanent employees of the Company participate in the SAR Scheme.<\/p>\n Participants in the SAR Scheme are remunerated with Remgro shares to the value of the appreciation of their rights to a specific number of Remgro ordinary shares that must be exercised within a period of seven years after the grant date. The earliest intervals at which the SARs are exercisable are as follows:<\/p>\n No specific performance criteria are stipulated. Awards to executives in terms of the SAR Scheme are made from time to time by the committee and such awards are usually based on a multiple of the total guaranteed package.<\/p>\n No award will be made to a single participant if at the time of or as a result of the making of such grant, the aggregate number of Remgro ordinary shares in respect of which any unexercised SARs granted to the participant may be exercised, shall exceed 2 197 399 Remgro ordinary shares.<\/p>\n Similarly, no award will be made if at the time of or as a result of the making of such grant, the aggregate number of Remgro ordinary shares in respect of which any unexercised SARs may be exercised, shall exceed 21 000 000 Remgro ordinary shares.<\/p>\n For detail of the current status of awards that were made to executive directors and members of the Management Board in terms of the SAR Scheme, click here<\/a>.<\/p>\n If it is assumed that all of the participants to the SAR Scheme exercise all options awarded to them on 1 July 2015, Remgro will have to deliver 1.5 million shares in order to settle its obligations. This calculation is based on Remgro\u2019s closing share price on 30 June 2015 of R255.94. A 10% increase or decrease in the Remgro share price will require the number of shares to be delivered to be 1.7 million shares and 1.3 million shares, respectively.<\/p>\n At 30 June 2015 Remgro held sufficient treasury shares to settle its obligations to deliver shares to the SAR Scheme participants.<\/p>\n The different components of the remuneration paid as described above, are summarised in the table below.<\/p>\n Executive directors and members of the Management Board do not have fixed-term contracts, but are employed in terms of the Company\u2019s standard contract of employment. The notice period for termination of service is one calendar month and the normal retirement age is 63. Executive directors and members of the Management Board also do not have exceptional benefits associated with the termination of their services.<\/p>\n Independent non-executive directors do not have any employment contracts and do not receive any benefits associated with permanent employment. Furthermore, they do not participate in the Company\u2019s long-term incentive plan. <\/p>\n The Board, on recommendation by the Remuneration and Nomination Committee, has decided that independent non-executive directors should not be remunerated by means of a base fee and attendance fee in respect of their Board and committee obligations. The fee payable to non-executive directors will thus, as in the past, be a fixed annual fee. The fee structure is reviewed annually on 1 July subject to prior approval by shareholders at the Company\u2019s Annual General Meeting. The fees are market related and take into account the nature of Remgro\u2019s operations. Remgro also pays for all travelling and accommodation expenses reasonably and properly incurred in order to attend meetings.<\/p>\n The annual fees payable to independent non-executive directors for the period commencing on 1 July 2014 were approved by shareholders on 25 November 2014.<\/p>\n Remgro has three non-independent non-executive directors, i.e. Mr J P Rupert, Dr E de la H Hertzog and Mr J Malherbe. Effective 31 August 2012, Dr Hertzog retired from his executive role at Mediclinic International Limited (Mediclinic).<\/p>\n Until his retirement Dr Hertzog\u2019s remuneration was borne by both Mediclinic (65%) and Remgro (35%). A portion of the latter, as approved by shareholders annually, was regarded as director\u2019s fees. Since his retirement Dr Hertzog receives the approved annual director\u2019s and committee fees paid to independent non-executive directors. Mr Rupert receives no emoluments from Remgro, while Mr Malherbe also receives the approved annual director\u2019s and committee fees paid to independent non-executive directors. <\/p>\n In terms of King III and the JSE Listings Requirements, a director shall not be regarded as independent if he has been employed by the Company or the Group in any executive capacity during the preceding three financial years. Accordingly, Dr Hertzog is still regarded as a non-independent non-executive director.<\/p>\n As in the case of independent non-executive directors, these directors do not participate in the Company\u2019s long-term incentive plan. It should, however, be noted that, subsequent to the acquisition of VenFin Limited during November 2009, Remgro SARs were awarded to Mr J Malherbe to compensate him for the cancellation of the VenFin Share Appreciation Right Scheme. Mr Malherbe does not qualify for any further allocation of SARs.<\/p>\n Details of the fee structure payable to non-executive directors for the years ended 30 June 2015 and 30 June 2014 are presented in the table below.<\/p>\n The proposed fee structure payable to non-executive directors for the year ending 30 June 2016 is presented in the table below.<\/p>\n Details of the remuneration paid to executive directors and fees paid to non-executive directors for the year under review, are set out on the following page. The current status of all offers made to the above groups in terms of the SAR Scheme is also presented.<\/p>\n The information for Messrs N J Williams and P J Uys, who are members of the Management Board and also prescribed officers in terms of the Companies Act, are presented separately.<\/p>\n (The information below was audited)<\/p>\n\n
\n
REMUNERATION APPROACH<\/h2>\n
\n
EXECUTIVE DIRECTORS AND MEMBERS OF THE MANAGEMENT BOARD<\/h2>\n
Fixed pay<\/h3>\n
Variable pay<\/h3>\n
\n
\n
\n Element<\/td>\n Purpose<\/td>\n Performance period
\n and measures<\/td>\nOperation and delivery<\/td>\n<\/tr>\n \n Total guaranteed package<\/td>\n Reflects market value of role and individual performance<\/td>\n Reviewed annually based on performance and market surveys<\/td>\n Benchmarked against upper quartile of the market of comparable companies<\/td>\n<\/tr>\n \n Long-term variable<\/td>\n Alignment with shareholder interests<\/td>\n Annually and 3 \u2013 5 year vesting period<\/td>\n As determined by the committee<\/td>\n<\/tr>\n<\/table>\n Contracts of employment<\/h3>\n
NON-EXECUTIVE DIRECTORS\u2019 REMUNERATION<\/h2>\n
Independent non-executive directors<\/h3>\n
Non-independent non-executive directors<\/h3>\n
\n
\n Type of fee (R)<\/td>\n Fee for the
\n year ended
\n 30 June
\n 2015<\/td>\nFee for the
\n year ended
\n 30 June
\n 2014<\/td>\n<\/tr>\n\n Board member<\/td>\n 245 000<\/td>\n 228 000<\/td>\n<\/tr>\n \n Chairman of the Audit and Risk Committee <\/td>\n 165 000<\/td>\n 153 000<\/td>\n<\/tr>\n \n Member of the Audit and Risk Committee<\/td>\n 83 000<\/td>\n 77 000<\/td>\n<\/tr>\n \n Member of the Remuneration and Nomination Committee<\/td>\n 41 000<\/td>\n 38 000<\/td>\n<\/tr>\n \n Chairman of the Social and Ethics Committee<\/td>\n 41 000<\/td>\n 38 000<\/td>\n<\/tr>\n<\/table>\n \n
\n Type of fee (R)<\/td>\n Proposed fee for
\n the year ending
\n 30 June 2016<\/td>\n<\/tr>\n\n Board member<\/td>\n 300 000<\/td>\n<\/tr>\n \n Chairman of the Audit and Risk Committee<\/td>\n 200 000<\/td>\n<\/tr>\n \n Member of the Audit and Risk Committee<\/td>\n 100 000<\/td>\n<\/tr>\n \n Member of the Remuneration and Nomination Committee<\/td>\n 50 000<\/td>\n<\/tr>\n \n Chairman of the Social and Ethics Committee<\/td>\n 50 000<\/td>\n<\/tr>\n<\/table>\n directors\u2019 emoluments<\/h2>\n
Fixed pay<\/h3>\n
\n
\n R’000<\/td>\n 30 June 2015<\/td>\n 30 June 2014<\/td>\n<\/tr>\n \n Fees<\/td>\n Salaries<\/td>\n Retire-
\n ment
\n fund<\/td>\nOther
\n benefits(7)<\/sup><\/td>\nTotal<\/td>\n Fees<\/td>\n Salaries<\/td>\n Retire-
\n ment
\n fund<\/td>\nOther
\n benefits(7)<\/sup><\/td>\nTotal<\/td>\n<\/tr>\n \n Executive<\/td>\n <\/td>\n <\/td>\n <\/td>\n <\/td>\n <\/td>\n <\/td>\n <\/td>\n <\/td>\n <\/td>\n <\/td>\n<\/tr>\n \n W E B\u00fchrmann<\/td>\n 245<\/td>\n 2 649<\/td>\n 574<\/td>\n 280<\/td>\n 3 748<\/td>\n 228<\/td>\n 2 492<\/td>\n 489<\/td>\n 266<\/td>\n 3 475<\/td>\n<\/tr>\n \n L Crouse<\/td>\n 245<\/td>\n 6 254<\/td>\n 1 289<\/td>\n 297<\/td>\n 8 085<\/td>\n 228<\/td>\n 5 842<\/td>\n 1 204<\/td>\n 279<\/td>\n 7 553<\/td>\n<\/tr>\n \n J W Dreyer(1)<\/sup><\/td>\n \u2013<\/td>\n \u2013<\/td>\n \u2013<\/td>\n \u2013<\/td>\n \u2013<\/td>\n 114<\/td>\n 1 409<\/td>\n 279<\/td>\n 28<\/td>\n 1 830<\/td>\n<\/tr>\n \n J J Durand<\/td>\n 245<\/td>\n 9 204<\/td>\n 1 874<\/td>\n 302<\/td>\n 11 625<\/td>\n 228<\/td>\n 7 617<\/td>\n 1 556<\/td>\n 283<\/td>\n 9 684<\/td>\n<\/tr>\n \n Subtotal<\/td>\n 735<\/td>\n 18 107<\/td>\n 3 737<\/td>\n 879<\/td>\n 23 458<\/td>\n 798<\/td>\n 17 360<\/td>\n 3 528<\/td>\n 856<\/td>\n 22 542<\/td>\n<\/tr>\n \n <\/td>\n <\/td>\n <\/td>\n <\/td>\n <\/td>\n <\/td>\n <\/td>\n <\/td>\n <\/td>\n <\/td>\n <\/td>\n<\/tr>\n \n Non-executive
\n (independent)<\/td>\n<\/td>\n <\/td>\n <\/td>\n <\/td>\n <\/td>\n <\/td>\n <\/td>\n <\/td>\n <\/td>\n <\/td>\n<\/tr>\n \n G T Ferreira<\/td>\n 286<\/td>\n \u2013<\/td>\n \u2013<\/td>\n \u2013<\/td>\n 286<\/td>\n 266<\/td>\n \u2013<\/td>\n \u2013<\/td>\n \u2013<\/td>\n 266<\/td>\n<\/tr>\n \n P K Harris<\/td>\n 286<\/td>\n \u2013<\/td>\n \u2013<\/td>\n \u2013<\/td>\n 286<\/td>\n 266<\/td>\n \u2013<\/td>\n \u2013<\/td>\n \u2013<\/td>\n 266<\/td>\n<\/tr>\n \n N P Mageza(2)<\/sup><\/td>\n 328<\/td>\n \u2013<\/td>\n \u2013<\/td>\n \u2013<\/td>\n 328<\/td>\n 305<\/td>\n \u2013<\/td>\n \u2013<\/td>\n \u2013<\/td>\n 305<\/td>\n<\/tr>\n \n P J Moleketi<\/td>\n 328<\/td>\n \u2013<\/td>\n \u2013<\/td>\n \u2013<\/td>\n 328<\/td>\n 305<\/td>\n \u2013<\/td>\n \u2013<\/td>\n \u2013<\/td>\n 305<\/td>\n<\/tr>\n \n M Morobe<\/td>\n 245<\/td>\n \u2013<\/td>\n \u2013<\/td>\n \u2013<\/td>\n 245<\/td>\n 228<\/td>\n \u2013<\/td>\n \u2013<\/td>\n \u2013<\/td>\n 228<\/td>\n<\/tr>\n \n F Robertson<\/td>\n 369<\/td>\n \u2013<\/td>\n \u2013<\/td>\n \u2013<\/td>\n 369<\/td>\n 343<\/td>\n \u2013<\/td>\n \u2013<\/td>\n \u2013<\/td>\n 343<\/td>\n<\/tr>\n \n S E N de Bruyn Sebotsa(3)<\/sup><\/td>\n 61<\/td>\n \u2013<\/td>\n \u2013<\/td>\n \u2013<\/td>\n 61<\/td>\n \u2013<\/td>\n \u2013<\/td>\n \u2013<\/td>\n \u2013<\/td>\n \u2013<\/td>\n<\/tr>\n \n H Wessels(4)<\/sup><\/td>\n 556<\/td>\n \u2013<\/td>\n \u2013<\/td>\n \u2013<\/td>\n 556<\/td>\n 535<\/td>\n \u2013<\/td>\n \u2013<\/td>\n \u2013<\/td>\n 535<\/td>\n<\/tr>\n \n Subtotal<\/td>\n 2 459<\/td>\n \u2013<\/td>\n \u2013<\/td>\n \u2013<\/td>\n 2 459<\/td>\n 2 248<\/td>\n \u2013<\/td>\n \u2013<\/td>\n \u2013<\/td>\n 2 248<\/td>\n<\/tr>\n \n <\/td>\n <\/td>\n <\/td>\n <\/td>\n <\/td>\n <\/td>\n <\/td>\n <\/td>\n <\/td>\n <\/td>\n <\/td>\n<\/tr>\n \n Non-executive
\n (non-independent)<\/td>\n<\/td>\n <\/td>\n <\/td>\n <\/td>\n <\/td>\n <\/td>\n <\/td>\n <\/td>\n <\/td>\n <\/td>\n<\/tr>\n \n E de la H Hertzog(5)<\/sup><\/td>\n 245<\/td>\n \u2013<\/td>\n \u2013<\/td>\n \u2013<\/td>\n 245<\/td>\n 228<\/td>\n \u2013<\/td>\n \u2013<\/td>\n \u2013<\/td>\n 228<\/td>\n<\/tr>\n \n J Malherbe<\/td>\n 245<\/td>\n \u2013<\/td>\n \u2013<\/td>\n \u2013<\/td>\n 245<\/td>\n 228<\/td>\n \u2013<\/td>\n \u2013<\/td>\n \u2013<\/td>\n 228<\/td>\n<\/tr>\n \n J P Rupert(6)<\/sup><\/td>\n \u2013<\/td>\n \u2013<\/td>\n \u2013<\/td>\n \u2013<\/td>\n \u2013<\/td>\n \u2013<\/td>\n \u2013<\/td>\n \u2013<\/td>\n \u2013<\/td>\n \u2013<\/td>\n<\/tr>\n \n Subtotal<\/td>\n 490<\/td>\n \u2013<\/td>\n \u2013<\/td>\n \u2013<\/td>\n 490<\/td>\n 456<\/td>\n \u2013<\/td>\n \u2013<\/td>\n \u2013<\/td>\n 456<\/td>\n<\/tr>\n \n Total<\/td>\n 3 684<\/td>\n 18 107<\/td>\n 3 737<\/td>\n 879<\/td>\n 26 407<\/td>\n 3 502<\/td>\n 17 360<\/td>\n 3 528<\/td>\n 856<\/td>\n 25 246<\/td>\n<\/tr>\n \n <\/td>\n<\/tr>\n<\/table>\n \n
\n (1)<\/sup><\/td>\n Mr J W Dreyer retired as executive director with effect from 31 December 2013.<\/td>\n<\/tr>\n \n (2)<\/sup><\/td>\n During the year under review Mr N P Mageza also received R455 000 (2014: R389 000) as director\u2019s fees from RCL Foods Limited, a subsidiary company of Remgro Limited.<\/td>\n<\/tr>\n \n (3)<\/sup><\/td>\n Ms S e n de Bruyn Sebotsa was appointed as independent non-executive director with effect from 16 March 2015.<\/td>\n<\/tr>\n \n (4)<\/sup><\/td>\n In addition to his director\u2019s fees and fee as chairman of the Audit and Risk Committee and chairman of the Social and Ethics Committee, an amount of R105 000 was also paid to Mr H Wessels during the year under review (2014: R116 100) for his attendance of meetings of subcommittees of the Audit and Risk Committee.<\/td>\n<\/tr>\n \n (5)<\/sup><\/td>\n With effect from 31 August 2012 Dr E de la H Hertzog retired from his executive role at Mediclinic International Limited (Mediclinic). Until his retirement, his remuneration was borne by both Mediclinic (65%) and Remgro (35%). In terms of King III and the JSE Listings Requirements, a director shall not be regarded as independent if he has been employed by the Company or the Group in any executive capacity during the preceding three financial years. Accordingly, Dr Hertzog is still regarded as a non-independent non-executive director.<\/td>\n<\/tr>\n \n (6)<\/sup><\/td>\n Mr J P Rupert receives no emoluments.<\/td>\n<\/tr>\n \n (7)<\/sup><\/td>\n Benefits include medical aid contributions and vehicle benefits.<\/td>\n<\/tr>\n<\/table>\n