ESG and sustainability

Remuneration Report

This report sets out our Remuneration Policy and Remuneration Implementation Report for executive directors and nonexecutive directors’ remuneration for the 2023 financial year and is presented in three parts:

i) Part 1: The background statement which provides context to our Remuneration Policy and performance; 
ii) Part 2: An overview of the forward-looking Remuneration Policy applicable in the 2024 financial year; and 
iii) Part 3: The Remuneration Implementation Report which sets out in detail how the existing policy was implemented during the year under review, including disclosure on payments made to executive directors and non-executive directors during the year ended 30 June 2023. 

Part 1: Background statement

Remgro’s remuneration philosophy is guided by its sustainability-focused business strategy, including ESG as a key component, the outcome of which is geared to deliver sustainable value and accretive returns for shareholders over the long term whilst simultaneously driving a positive ESG impact that unlocks shared value for all stakeholders.

Due to the nature of the business, the remuneration framework, on an organisation-wide basis, provides for fixed remuneration (i.e. salary and benefits) and a long-term share plan, which only renders value if the performance criteria linked to sustainable value and the employment condition are met. As an investment holding company, the Remuneration and Nomination Committee (the committee) views increased market capitalisation, sustainable growth in the share price and above-average dividend yield (collectively referred to as shareholder total return) as critical metrics to deliver sustainable value to shareholders over the long term. In line with this approach, Remgro does not pay short-term incentives (i.e. cash bonuses) and believes that management’s decision-making should be long-term focused. It is aligned with the philosophy that they should be rewarded where value creation is demonstrated, without excessive risk taking in the short term. This two-tier approach makes the Remgro Remuneration Policy focused and avoids unnecessary layers of complexity. Our remuneration philosophy and policy are further detailed in Part 2 of this report.

Overview of performance and remuneration outcomes for the year under review

The current challenging environment that businesses are required to operate in, is widely recognised and covered regularly in the media. Remgro and its investee companies, like all other South African businesses, are expected to successfully and sustainably operate under tough and challenging conditions such as ongoing load shedding, high inflation, high interest rates, sharp increases in electricity prices, foreign exchange volatility, ongoing geopolitical tensions, weak business confidence and unacceptable levels of crime and corruption. This becomes especially relevant as it relates to the impact on consumers and the risk of increased social instability as poverty levels rise. With low levels of expected economic growth, failing state infrastructure relating to energy, transport and logistics in particular, and the slow pace of economic reforms to date, the urgency with which these issues need to be addressed cannot be overstated.

Despite this very challenging business environment, the committee is very pleased with the Group’s performance in managing to maintain the positive earnings momentum despite all the headwinds. The committee is also pleased with the completion of both the Mediclinic Group Limited (Mediclinic) and Distell Group Holdings Limited (Distell)/Heineken International B.V. (Heineken) corporate transactions that were implemented during the year. Both of these transformative transactions have been in the making for many years, and it is satisfying to finally acknowledge their completion.

The finalisation of these transactions marks another inflection point in Remgro’s rich history – prior to implementation, approximately 70% of Remgro’s portfolio could be accessed directly via relevant issuers on various stock exchanges. The ratio between the value of the unlisted and listed portion of our portfolio has completely switched, with the value of the unlisted portion of Remgro’s portfolio now sitting at approximately 70%, materially increasing Remgro’s scarcity factor and positioning it for further growth.

During the year under review, the company made good progress in delivering our other strategic priorities. These priorities remain unchanged and focus on growing our triple bottom line sustainably by unlocking value for our shareholders, efficient capital allocation and continued focus on our sustainability drive.

Management remains committed towards unlocking further value through intensified focus on its core turnaround and growth assets and disposal of non-core assets, combined with a renewed focus on new growth opportunities. The Company also continue its sustainability drive to position Remgro as an ESG industry leader through continuous improvement in disclosure and shareholder engagement.

Total guaranteed package (TGP)

In line with Remgro’s philosophy on fair and responsible remuneration, the following decision was taken with regards to increases:

  • Executive directors, members of the Management Board and Executives were granted increases of circa 5.80% for the 2023 financial year.
  • Employees at management levels received increases of around 6.00% and non-management employees received salary adjustments of on average between 6.25% and 6.5% for the 2023 financial year.

Long-term incentive (LTI) plans

The vesting outcomes for the 2020 LTI awards, for which the performance period ended on 30 June 2023, were 73%. The better than target outcome, should be considered against the background of our analysis of shareholder value creation through the growth in Remgro's share price over the vesting period. The Remgro share price has grown by 50% over this period (from R98/share to R147/share) which approximates a 14.25% annualised return. When adding the Remgro dividend payments (which ranges between 1.25% to 1.5% per annum over the vesting period) to the growth in share price, this provides for an annualised total shareholder return in excess of 15.5%. The committee is therefore comfortable that the vesting outcome is aligned to shareholder value creation.

Details on the vesting of these awards are set out in Part 3 of this report.

Embedding Environmental, Social and Governance (ESG) measures within reward

Remgro aims to be the trusted investment company of choice that consistently creates sustainable stakeholder value to deliver not only financial returns for shareholders, but to make a positive ESG impact that delivers shared value to all our stakeholders. While workplace, economic, social and environmental sustainability practices have always been part of Remgro’s core values and are entrenched within Remgro’s overall governance framework, Remgro aims to become an ESG leader within the South African context.

Since 2021, the Group has placed increased emphasis on ESG practices, recognising that the best way to advance our sustainability agenda is by partnering with our investee companies across their value chains to implement ESG principles and the creation of consistent standards that collectively deliver greater and more measurable impact over the long term for all our stakeholders. Within the Remgro holding company, appropriate Strategic and Operational ESG Committees and work groups were established to ensure that Remgro remains engaged with and furthers its values-driven ethos.

Remgro’s approach to ESG and sustainability is anchored in its investment stewardship role. Remgro’s responsible investment principles are at the heart of our decision-making to ensure adherence to robust principles and criteria to deliver sustainable financial returns, alongside the creation of positive, measurable ESG impact. This includes purposefully integrating impact throughout the investment lifecycle where sustainable value can be generated over the long term to improve ESG performance.

Remgro is committed to helping those companies it invests in shape their approach to ESG to ensure our investments reflect our ambition to create environmental, social and economic change throughout our ecosystem. Governance and climate risk mitigation practices have been embedded into Remgro’s value chain activities across the Group and its investee companies’ ecosystem to drive progress.

Journey to date

The first Remgro LTI awards with the ESG measures were awarded in 2020 (being the 2019 and 2020 LTI awards). To further incentivise and motivate management in driving this journey, qualitative ESG measures were incorporated into the Remgro LTI awards in 2021 and 2022, which measures detailed strategic milestones to be achieved by specified dates. By incorporating specific ESG measures into the LTI, Remgro is illustrating its public commitment to ESG. An overview of the specified areas of focus, covered by the 2019 to 2022 LTI awards, are outlined below:

Area 1 – Building Remgro’s ESG foundation/platform:

Referencing the 2019 and 2020 LTI awards, ESG milestones were primarily linked to Remgro’s ESG journey as an investment holding company which requires the successful delivery of:

  • Remgro’s ESG terms of reference and policies;
  • Remgro’s ESG strategy and approach;
  • Remgro’s ESG Investment Framework

For Remgro to achieve a stretch ESG performance outcome on its 2019 and 2020 LTI awards a secondary focus was placed that, in addition to Remgro building an ESG foundation/platform (linked to the milestones outlined above), Remgro should strive to accelerate the execution of an ESG impact within key subsidiary portfolio companies through Remgro’s strategic influence in guiding these companies to embed an ESG focus within their own remuneration policies.

Area 2 – Providing strategic guidance to deliver an ESG portfolio impact:

Referencing the 2021 and 2022 LTI awards, the ESG milestones evolved and were primarily linked to Remgro delivering a portfolio impact on the following earmarked investee companies (who collectively represent circa 80% of Remgro’s INAV):

         
  Heineken Beverages  Mediclinic  RCL Foods   
  Maziv Group  Air Products  OUTsurance Group   
  TotalEnergies  Wispeco  Siqalo Foods   
         

The anticipated portfolio impact was linked to Remgro successfully delivering strategic influence on the following:

  • Development and implementation of ESG-focused investee company board subcommittee including the associated terms of reference.
  • Development of a specific investee company formalised ESG strategy and updated remuneration policies embedding ESG principles.
  • Assistance with the appointment of ESG providers who can assist investee companies in determining their ESG footprints after which critical environmental measures, such as carbon emissions, across the identified investee companies, can be determined as a baseline measure which can inform aspirational environmental goal(s).

Taking the above criteria into consideration, Remgro’s ESG success rate for the 2021 and 2022 LTI awards were expressed as a governance/influence factor measured with reference to how many earmarked investment companies they successfully strategically influenced referencing the above specified criteria.

  • Remgro initiated an Investment Managers’ Conference and implemented a series of Investment Managers’ Workshops to engage on ESG. A key component of this is the introduction of a Standard Operating Procedure for our investment managers to integrate ESG into their investment decisions.

It is the committee’s view that the specific qualitative targets were suitably challenging, aligned with the Company’s strategy and laid a solid foundation upon which the Company can deliver on its ESG ambition.

More details are provided in Parts 2 and 3 of this report.

Voting results and shareholder engagement

At the Annual General Meeting (AGM) held on 30 November 2022, 64.91% of Remgro’s ordinary shareholders voted in favour of the Remuneration Policy, with 70.35% of ordinary shareholders voting in favour of the Remuneration Implementation Report. In light of the fact that more than 25% of ordinary shareholders voted against the Remuneration Policy and the Remuneration Implementation Report, and in compliance with King IV and the JSE Listings Requirements, dissenting shareholders were invited to engage with the Company. Shareholders were provided further focused engagement opportunities through virtual engagement sessions during our shareholder engagement roadshows.

The specific areas of concern, together with actions taken as a result of the issues raised, are listed in more detail below.

 

Shareholder concern

 
 

Action taken/Remgro’s response

 
 
               
               
  Remuneration Policy
Timeline as to when the quantifiable ESG metrics will be introduced 
 

The intention of the committee and management was to introduce quantifiable ESG metrics as soon as practically possible. For this purpose, the target and stretch measures for 2021, 2022 and beyond were not disclosed in the 2021 Remuneration Report. As a holding company Remgro is not fully aware of the ESG maturity levels at different investee companies and the baseline measures for key ESG measures at these companies.

In 2022, Remgro commissioned a baseline ESG footprint report. This entailed obtaining certain qualitative and quantitative information from selected investee companies. During this process, Remgro assessed the latest leading best practice related to stewardship and has incorporated some of those principles into the baseline questionnaires and to inform target setting discussions.

In 2023, the exercise was repeated to ascertain progress year on year. Feedback demonstrated good progress regarding the amount of ESG information that the investee companies are measuring and tracking. Remgro and its investee companies have implemented numerous ESG processes since the ESG baseline footprint report was first issued in June 2022 and improvements were noted in many areas.

 
 
  Should the long-serving non-executive directors still be regarded as independent   

The committee believes on a substance over form basis that long-serving non-executive directors can still be regarded as independent.

The independence of non-executive directors is reviewed annually and those independence of non-executive directors, who have served on the Board for more than nine years, is subject to a rigorous review by the Board.

Furthermore, the Board, led by the Lead Independent Director, considered the independence of the independent non-executive directors, and is satisfied with the overall independence of the Board.

In addition, the committee’s view is that the overriding concern should not be one of enforcing alignment or seeking independence at all costs but should be whether the governing body is knowledgeable, skilled, experienced, diverse and independent enough to discharge its roles and responsibilities fully.

The committee mandated a working group consisting of two of the committee non-executive directors (NEDs) and two executive directors to develop a roadmap to refresh the Board. The principles this roadmap will be developed on, remain: suitable skills, competencies, diversity and independence. The first formal feedback to the committee will be on 4 December 2023.

 
 
  The LTI financial performance conditions does not incorporate a sufficient element of “stretch” performance   

As a consequence of Remgro’s investment strategy, which focuses on the delivery of sustainable long-term shareholder value growth and the payment of stable dividends, Remgro designed and implemented a LTI policy which closely mimics its investment strategy.

Historical INAV and free cash flow LTI performance targets were set based on the principle that incentive targets should be stretching yet realistic, given business and economic realities.

Furthermore, with the aim of simplicity, a uniform set of performance targets have historically been used for both the Conditional Share Plan (CSP) awards and the Share Appreciation Right (SAR) awards, although the risk-return profile of the SAR awards only entitles the participants to unlock value associated with the growth in share price – representing a further embedded share price growth performance condition.

The calibration of the historical INAV performance target references a 3-5 year longbond rate which is aligned with vesting period of the CSP and SAR awards. Stretch performance required and additional spread of 5% which approximates a standard deviation of the JSE all share and Top 40 indices (representing two alternative balanced portfolios) over a historical 15-year period.

After careful deliberation and following extensive engagement with shareholders the committee agreed that the LTI financial performance conditions for the 2024 financial year (FY2024) Remuneration Policy (refer to Part 2 on page 100) should be amended with the following enhancements being proposed for awards made in FY2024 and beyond:

  • INAV growth will be replaced with a Total Return performance measure, with Total Return being quantified as INAV growth plus Dividend yield. This proposed amendment provides shareholders with an enhanced measure of the total value that has been delivered for shareholders over a LTI performance period.
  • The LTI performance measures for the SAR and CSP award will be identical, however the performance targets of the financial performance measures will be appropriately calibrated to mimic the risk-return profile of the underlying instruments. This will result in the CSP awards having more stretching financial performance targets than the SAR awards.
In addition, to further drive performance the committee has also elected to split new LTI awards in a ratio of 75% CSPs and 25% SARs, relative to the historical split of 50% CSPs and 50% SARs. 
 
  The LTI performance conditions does not place a large enough emphasis on the closing of the share price to net asset value (P/NAV) discount.   

The committee is of the view that the historical LTI performance conditions (consisting of ESG, INAV growth and free cash flow growth) collectively drives sustainable value creation for shareholders and wider stakeholders, which endorses the right behaviours that should positively contribute to narrowing the P/NAV discount.

In addition, taking cognisance of the above proposed LTI enhancements, coupled with strategic initiatives, the committee remains confident that the LTI performance conditions will collectively continue to drive the right behaviours going forward.

To further drive alignment with shareholders the committee has also introduced a minimum shareholding requirement (MSR) for the CEO and CFO – set at 375% of TGP for the CEO and 200% of TGP for the CFO. The CEO and CFO will be granted a 5-year period to achieve the MSR. The committee is of the view that MSR should also positively contribute in an attempt to narrow the P/NAV discount.

 
 
               

Remuneration is key in incentivising employees across all levels to work towards driving the execution of Remgro’s strategic objectives and to build a sustainable business over the long term. The committee remains committed to ongoing engagement with shareholders and welcomes any constructive feedback they may wish to provide to ensure that the Company’s approach to remuneration supports fair and responsible remuneration.

At the 2023 AGM Remgro will put its Remuneration Policy and Remuneration Implementation Report to two separate non-binding advisory shareholder votes (see Ordinary Resolutions Numbers 14 and 15 in the Notice to shareholders) and the committee looks forward to a positive outcome in this regard.

Remuneration and Nomination Committee activities during 2023

The committee’s activities for 2023 were geared towards monitoring the achievement of Remgro’s strategic objectives. In addition to the committee’s normal duties, the committee:

  • Reviewed and enhanced the performance criteria (financial, ESG as well as key strategic measures) linked to the LTIs as well as the individual key performance initiatives (KPIs) of the executive team. The revised individual KPIs were aligned with Remgro’s strategic objectives and ESG measures.
  • Introduced a MSR policy with the aim to further align executives with shareholders.
  • Performed a non-executive director fee benchmark referencing 12 companies, who are in closest proximity to Remgro from a market capital perspective, within the JSE Top 40.

Future areas of focus

During the 2024 financial year the committee will focus on the following forward-looking considerations:

  • To continue the journey to align the remuneration strategy with Remgro’s key strategic focus areas (including ESG) with a focus on the incorporation of quantitative ESG performance measures within the LTI plan design.
  • In line with our philosophy of remunerating fairly and responsibly, continue to identify and address any discrepancies.
  • To consider opportunities and methodology to share information regarding fair and equitable remuneration with shareholders.
  • To develop a minimum shareholding requirement (MSR)framework to introduce at investee companies.
  • To conclude the review of the current Board composition against the principles of inclusivity and diversity, skills and experience and suitable independency
  • To continue to ensure that our internal human resources and remuneration policies support transformation across the business.

Advisors

During the 2023 financial year, the committee has engaged two external remuneration consultants namely PricewaterhouseCoopers Inc. (PwC) and REMchannel, to assist management and the Board in performing their duties and responsibilities.

The committee considered the advice, opinions and services received by PwC and REMchannel during the 2023 financial year. The committee is satisfied and regards the consultants as being wholly objective and independent.

In conclusion

The committee is of the view that during the 2023 financial year, Remgro’s Remuneration Policy achieved its stated objectives. Remgro constantly strives to improve the Company’s remuneration practices and we look forward to our engagement with our shareholders and receiving their support on the resolutions for both the Remuneration Policy and Remuneration Implementation Report (see Ordinary Resolutions Numbers 14 and 15 in the Notice to shareholders) at the AGM on 4 December 2023.


Part 2: Remuneration Policy

The Remuneration Policy provides an overview of Remgro’s remuneration principles for the organisation as a whole and applies to all permanent employees. The information provided in this policy has been approved by the Board on recommendation by the committee. This Remuneration Policy will be put to a non-binding advisory vote by shareholders at the next AGM on 4 December 2023.

Governance

The committee is appointed by the Board with delegated powers and the functioning of this dedicated Board committee is well established within Remgro’s mode of operation. In essence it is the committee’s role to ensure fair and responsible remuneration across the Company, by way of policy making and implementation, and that the disclosure of remuneration is accurate, complete and transparent. Ultimate responsibility remains with the Board.

The committee is governed by a mandate, reviewed and approved by the Board annually, that incorporates best practice governance recommendations and serves to assist members of this committee in the execution of their role and responsibilities.

The committee consists of four non-executive directors, three of whom are independent. The members of the committee for the year under review were:

  • Mr J P Rupert (chairman);
  • Ms S E N De Bruyn (lead independent non-executive director);
  • Mr P J Moleketi (independent non-executive director); and
  • Mr F Robertson (independent non-executive director).

The Board acknowledges the recommended practice in King IV that the Chairman of the Board should not be the chairman of this committee but given the following reasons, this arrangement is deemed appropriate:

  • The necessity to align the Company’s remuneration approach with corporate strategy;
  • The Chairman receives no emoluments or fees from Remgro thus there are no conflicts with regard to the approval of non-executive director fees;
  • The Chairman is a significant shareholder in the business hence it is not regarded as unreasonable for him to chair this committee; and
  • In terms of committee composition, the majority of the committee remains independent non-executive directors.

The committee formally met twice during the year and had numerous informal interactions in preparation for the formal meetings, engagements with shareholders and pre-meetings. The details on the attendance of the formal meetings are set out in the Corporate Governance Report.

The mandate, set out in the terms of reference of the committee, includes the following:

In respect of its nomination function –

  • Assist the Board with the process of identifying suitable candidates for appointment as directors;
  • Ensure the establishment of a formal and transparent process for the appointment of directors;
  • Oversee the development of a formal induction programme for new directors;
  • Evaluate the performance of the Board; and
  • Ensure that succession plans for the Board, Chief Executive Officer (CEO) and other Management Board members are developed and implemented.

In respect of its remuneration function –

  • Oversee the establishment of an organisation-wide Remuneration Policy that promotes positive outcomes across the economic, social and environmental context in which Remgro operates;
  • Promote an ethical culture and responsible corporate citizenship in the context of remuneration;
  • Oversee the fair, responsible and transparent setting and administering of remuneration of all employees;
  • Advise on the fees of non-executive directors, for approval by shareholders at the AGM;
  • Ensure that remuneration meets Remgro’s needs and strategic objectives and is administered in accordance with the shareholder-approved plan rules;
  • Oversee the preparation and recommendation to the Board of the Remuneration Report to be included in the Integrated Annual Report; and
  • Ensure that the Remuneration Policy and Remuneration Implementation Report are put to two separate non-binding advisory votes by shareholders at the AGM.

Linking ESG to remuneration

Existing practices

Workplace, economic, social and environmental sustainability practices have always been part of Remgro’s core values and through our new ESG strategy, these practices are entrenched within our overall remuneration framework.

 

Link to ESG

 
 

Link to reward

 
 
               
               
  Environmental    Inclusion of ESG measures within the LTI plans
Individual KPIs include specific ESG measures 
 
  Social   

TGP of non-management employees is competitive and is positioned around the 75th percentile of the market

All employees participate in the LTI plan

Lower-level employees typically receive higher percentage increases

 
 
  Governance   

Balancing employee interests with that of shareholders by rewarding for the delivery of growth in INAV

Alignment of executive remuneration and shareholder value creation through the adoption of minimum shareholding requirements (MSR)

Aligning to international best practice by incorporating malus and clawback provisions into variable pay

Clear and transparent remuneration reporting

Development of an ESG governance framework

 
 
               

Remgro’s ESG journey

As noted in Part 1 of this report, Remgro’s aim is to become an ESG leader and is focused on maximising its impact as an investment holding company by establishing and rolling out an ESG strategy and governance framework throughout the Group of identified investee companies. Remgro commenced its ESG journey in 2020.

In order to drive the execution of this goal and to ensure that it is sufficiently prioritised, ESG measures were introduced into the LTIs in 2021 and 2022 as a non-financial component with a weighting of 20%. The ESG measures for the 2019 and 2020 awards were qualitative measures focused on governance and risk as well as strategic investment decisions and portfolio impact and which detailed milestones to be achieved by specified dates in order to lay the foundation for the establishment and implementation of an ESG strategy throughout the Group.

Building on the foundation laid through delivery on the qualitative milestones, Remgro has introduced quantitative ESG measures, taking the form of a governance influence factor (as referenced in Part 1), into the 2021 and 2022 LTIs which measures are aimed at establishing the appropriate ESG governance structures within key investee companies.

Fair and responsible remuneration across the Company

The delivery of Remgro’s strategy is dependent on the values, talent and skills of all employees across the Company and Remgro therefore views employees as critical assets. Remgro committed to the principle of rewarding all employees across the Company in a manner which is fair and responsible and strives to create an environment which is inclusive. This commitment is entrenched in the Remuneration Policy.

The TGP of all employees is positioned around the 75th percentile of the market which takes into account that the Company does not have short-term incentives (STI) in place. For executive directors, prescribed officers and senior managers, the company targets the median of the reference group on a Total Reward (TR) comparison. All employees are furthermore eligible to receive LTI awards and not only executives. Lower-level employees typically receive higher percentage increases than other employees.

Further ongoing actions taken in this regard include:

  • Assessment of remuneration conditions between employees at the same level in accordance with the principle of “equal pay for work of equal value” to identify and address any unjustifiable remuneration disparities.
  • Investing in its people initiatives, which include: talent management; development opportunities for all employees; various training courses as per identified needs and an employee value proposition aligned to the corporate values and culture.
  • Fair and responsible remuneration practices remain a key focus area for the committee in the 2024 financial year.

Components of remuneration

Remgro has two components of remuneration, namely fixed remuneration (which includes benefits) and LTIs in the form of its old Remgro Equity Settled Share Appreciation Right Scheme (SAR Scheme), current Remgro Equity Settled Share Appreciation Rights Plan (SAR Plan) and Remgro Equity Settled Conditional Share Plan (CSP). Remgro does not pay short-term incentives and believes that management’s decision-making should be long-term focused and aligned with the philosophy that they should be rewarded where long-term value creation is demonstrated, without excessive risk taking in the short term.

The same remuneration principles and components apply to all employees of Remgro. The remuneration policies, principles and practices of investee companies are governed through remuneration committee structures in these organisations.

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Fixed remuneration

 

Purpose

 
To provide competitive fixed remuneration that will attract and retain appropriate talent. Reflects an individual’s responsibilities, experience and role.
 

What does this contain?

 

Referred to as TGP (Total Guaranteed Pay), includes components such as cash salary, travel allowance and the Company’s contributions towards retirement funding and the medical scheme. All guaranteed benefits are funded from the TGP.

Retirement funding contributions range between 12.5% and 27.5% of pensionable emolument and the key features of the retirement fund are as follows:

  • Retirement savings component with member investment options and a trustee default option;
  • Insured flexible death, disability and funeral benefits; and
  • Preservation options when exiting the fund.

Membership to a medical scheme is compulsory for all employees and contributions are funded from their TGP. All employees are eligible for membership of the in-house medical scheme, Remedi, and the scheme provides three different options for members to choose from annually. These options aim to accommodate the different healthcare needs and affordability of the diverse membership of the scheme.

Under specific circumstances Remgro also offers employees post-employment medical benefits. All details in this regard are disclosed in the Annual Financial Statements.

Only employees who are required to regularly travel for business purposes receive travel allowances, which is funded from their TGP.

 

How is the TGP benchmarked?

 

Guaranteed packages for all employees are benchmarked against the upper quartile of the market for comparable companies utilising independent salary surveys.

Remgro currently makes use of the REMchannel national survey for purposes of benchmarking employees. For Management Board members and senior executives, the more focused JSE Top 40 circle provided by REMchannel is used to benchmark TGP.

The TGP is positioned competitively to the market to ensure that the right talent is attracted and retained. It further supports the remuneration approach of no short-term cash bonuses and discourages excessive risk taking which may be driven by leveraged cash bonuses.

 

Annual review process

 

The committee conducts an annual review of the TGP for executives and approves the increase percentage for employees below executive level. As part of this review the committee considers the actual TGP, the LTI opportunity as well as the Total Reward outcome for all employees (including Management Board members and senior executives) against the median market benchmarked data.

Adjustments to the TGP depends upon the employee’s level of responsibility and his/her overall performance.

The CEO, who attends all committee meetings by invitation, may propose increases to the TGP, excluding his own, during such review meetings.

 

Variable remuneration

 

Share Appreciation Rights Plan

 
 

Conditional Share Plan

 

Purpose

 
Ensures alignment between personal wealth creation and corporate strategy and supports long-term employee retention.
 

How does it work?

 

This is an equity settled plan whereby selected employees are awarded rights to receive shares equal to the long-term growth in the Remgro share price and market capitalisation of the Company. These rights are awarded free of charge. The ultimate vesting of shares will be subject to prospective performance conditions for selected participants as well as an employment condition.

The participants will only become shareholders in Remgro with shareholder rights, including dividend and voting rights, on the settlement date.

 
 

This is an equity settled plan under which all employees may be granted an award consisting of the conditional right to receive Remgro shares at a future point in time. These conditional shares are awarded free of charge. The ultimate vesting of shares will be subject to prospective performance conditions for selected participants as well as an employment condition.

The participants will only become shareholders in Remgro with shareholder rights, including dividend and voting rights, on the settlement date, which will be shortly after the vesting date.


 

Who qualifies to participate?

 
The SAR Plan is currently used to incentivise executive directors and employees at senior executive level only.
 
 
All permanent employees of the Company may participate in the CSP.

 

Determination of value/allocation

 

The committee makes annual awards in terms of the SAR Plan and the CSP to participants, based on a multiple of TGP. The set annual multiples are determined by reference to a participant’s job grade, role, the need to attract and/or retain key talent and the value added by the participant for Remgro and shareholders. The face value award multiples are as follows:

CEO

 
 

3.00 x TGP

 

Executive directors and prescribed officers

 
 

2.50 x TGP

 

Other employees

 
 

10% – 120% of TGP (different multiples based on the participant’s job grade, role and performance conditions (if applicable))

 

For the CEO, executive directors, other members of the Management Board (prescribed officers) and identified investment executives these multiples are split in the ratio of 25% for the SAR Plan awards and 75% for the CSP awards. These awards are subject to stretching financial Company performance conditions, ESG and strategic measures as well as individual performance conditions which focus on governance and risk including strategic investment decisions and portfolio impact.

For all other participants, 100% of the award is under the CSP. The vesting of these awards is subject to continued employment only.

These multiples are within current market parameters.

In addition, the rules of the CSP allow for ad hoc awards to be made to participants in exceptional circumstances as determined by the committee.

Refer to the Remuneration Implementation Report here for previous SARs and CSPs awarded.

 

Dividend equivalents

 

Not applicable.

 

 

 
 

Participants will be eligible to receive dividend equivalents on vested shares at the end of the vesting period of the award. The dividend equivalent will be rolled up over the vesting period and delivered as additional shares on the vesting date.


 

Vesting and exercise/settlement

 

Participants in the SAR Plan are remunerated with Remgro shares to the value of the appreciation of their rights to a specific number of Remgro ordinary shares.

The earliest intervals at which the SARs vest and are exercisable are as follows:

  • One third after the third anniversary of the grant date;
  • An additional third after the fourth anniversary of the grant date; and
  • The remainder after the fifth anniversary of the grant date.

All SARs must be exercised within seven years after the grant date, upon which date unexercised SARs lapse.

Vesting is conditional on fulfilment of the employment period and achievement of performance conditions (where applicable).

 
 

Awards under the CSP will vest as follows:

  • One third after the third anniversary of the grant date;
  • An additional third after the fourth anniversary of the grant date; and
  • The remainder after the fifth anniversary of the grant date.

Vesting is conditional on fulfilment of the employment period and achievement of performance conditions (where applicable).



 

 

Performance conditions

 

The SAR Plan has an embedded performance hurdle whereby participants will only benefit if there is long-term share price appreciation and thus value creation for Remgro shareholders.

2023 Award

Following extensive engagement with shareholders the committee agreed that for the 2023 SAR and CSP awards, which is expected to be made in December 2023, the LTI performance criteria should be enhanced to include the following amendments:

  • INAV growth will be replaced with a Total Return performance measure, with Total Return being quantified as INAV growth plus Dividends paid. This proposed amendment provides shareholders with an enhanced measure of the total value that has been delivered for shareholders over a LTI performance period.
  • The LTI performance measures for the SAR and CSP award will be identical, however the performance targets of the financial performance measures will be appropriately calibrated to mimic the risk return profile of the underlying instruments. This will result in the CSP awards having more stretching financial performance targets then the SAR awards.

In addition, to further drive performance the committee has also elected to split the December 2023 LTI awards in a ratio of 75% CSPs and 25% SARs, relative to the historical split of 50% CSPs and 50% SARs.

An overview of the anticipated financial and non-financial performance measures for the December 2023 SAR and CSP awards are set out below:

Financial scorecard – representing lagging indicators

Performance measure

 

Weight

 

Threshold (vesting 30%)(1)

 

On-target (vesting 50%)(1)

 

Stretch (vesting 100%)(1)

 

CSP →
Total Return
(INAV growth + Dividend yield)

 

50%

 

Year one Total Return plus the 3 – 5 year SA Long bond rate over three financial years

 

Year one Total Return plus the 3 – 5 year SA Long bond rate plus [2% to 4%](2) over three financial years

 

Year one Total Return plus the 3 – 5 year SA Long bond rate plus [6% to 8%](2) over three financial years

 

SAR →
Total Return (INAV growth + Dividend yield)

 

Year one Total Return plus CPI over three financial years

 

Year one Total Return
plus the 3 – 5 year
SA Long bond rate over
three financial years

 

Year one Total Return plus
the 3 – 5 year SA Long
bond rate plus [3% to 4%](2) over three financial years

 

CSP →
Free cash flow (FCF)

 

25%

 

Year one FCF plus CPI over three financial years

 

n/a

 

Year one FCF plus CPI plus
[2% to 3%](2) over three
financial years

 

SAR →
Free cash flow (FCF)

 

Year one FCF plus CPI over three financial years

 

n/a

 

Year one FCF plus CPI plus [1% to 1.25%](2) over three financial years

 

  1. For performance between these points linear vesting will apply.
    The committee will annually consider the final percentage applicable based on the prevailing market conditions and company performance.
Strategic scorecard – representing leading indicators

Performance measure

 

Weight

 

Threshold (vesting 30%)(1)

 

On-target (vesting 50%)(1)

 

Stretch (vesting 100%)(1)

 

ESG impact(2) through influencing investee companies, ESG rating agencies and climate goals, diversity and enhanced disclosure

 

15%

 

Internal targets as approved by Remuneration and Nomination Committee and aligned with overall ESG strategy. Committee will assess achievement against objectives on a 5-point scale and will award scores as follows:

ESG scorecard outcome (as % of weight) 

Rating

 

1 (no vesting)

 

2 (threshold)

 

3 (target)

 

4 (above target)

 

5 (stretch)

 
Vesting %   0%   30%   50%   75%   100%  
   
 
               
 

Strategic
initiative execution focused on(3)

Efficient capital allocation, portfolio optimisation, people and talent pipeline and stakeholder engagement.

 

10%

 

Internal targets as approved by Remuneration and Nomination Committee and aligned with overall business strategy. Committee will assess achievement against objectives on a 5-point scale and will award scores as follows:

Strategic scorecard outcome (as % of weight) 
Rating  

1 (no vesting)

 

2 (threshold)

 

3 (target)

 

4 (above target)

 

5 (stretch)

 
Vesting %   0%   30%   50%   75%   100%  
   
 

  1. For performance between these points linear vesting will apply.
  2. Through these targets the Company will influence proper governance, reporting and measurements of ESG activities.
  3. These initiatives focus on assisting in addressing the P/NAV discount.

In addition, the vesting of awards can be modified based on the extent to which the participant meets their individual performance conditions. The modification can result in an upward or downward adjustment of the vesting outcome with an upward adjustment capped at 1.2 x the vesting outcome.

These performance conditions will apply to executive directors and other members of the Management Board (prescribed officers) in respect of SAR Plan awards and to executive directors, other members of the Management Board (prescribed officers) and identified investment executives in respect of CSP awards.

All other participants to the CSP will be allocated retention awards and will have to be in the service of the Remgro Group upon vesting.

 

Early termination of employment

 

Participants may either be classified as “bad leavers” or “good leavers” and the following applies:

  • Bad leavers

    Participants will forfeit all unvested awards.

  • Good leavers

    A pro rata portion of the participant’s unvested award(s) shall early vest on the date of termination of employment to the extent to which the committee determines that the performance conditions (if any) have been met. The portion of the shares that will vest will reflect the number of complete months served from the award date to the date of termination of employment, over the total number of months in the vesting period.

In addition, the rules of the SAR and the CSP allow for early vesting of awards on the date of termination of employment in exceptional circumstances as determined by the committee.
 

Change of control

 

In the event of a change of control of the Company occurring before the vesting date of any award, a portion of the award held by a participant will vest as soon as reasonably practicable thereafter. The portion of the award which shall vest will be determined based on the number of months served from the award date to the change of control date, over the total number of months in the vesting period and the extent to which the performance condition(s), if applicable, have been met. Any awards which do not vest will, subject to the discretion of the committee, remain subject to the terms of the relevant award letter.

 

Variation in share capital

 

Participants shall continue to participate in the SAR Plan and the CSP in the event of a variation in the Company’s share capital. The committee may make such adjustment to the award or take such other action to place participants in no worse position than they were prior to the happening of the relevant event and to provide that the fair value of the award immediately after the event is materially the same as the fair value of the award immediately before the event.

 

Dilution limits

 

Individual basis
No award will be made to a single participant if at the time of or as a result of the granting of such award, the aggregate number of Remgro ordinary shares in respect of which any unexercised SAR Plan awards or CSP awards granted to the participant, shall exceed 5 290 000 Remgro ordinary shares, being approximately 1% of issued ordinary shares.

Overall basis
Similarly, no award will be made if at the time of or as a result of the granting of such award, the aggregate number of Remgro ordinary shares in respect of which any unexercised SAR Plan awards may be exercised or CSP awards, shall exceed 26 450 000 Remgro ordinary shares, being approximately 5% of issued ordinary shares.

 

Settlement considerations

 

If it is assumed that all of the participants to the SAR Plan exercise all options awarded to them on 1 July 2023, Remgro will have to deliver 523 069 shares in order to settle its obligations. This calculation is based on Remgro’s closing share price on 30 June 2023 of R147.05. A 10% increase or decrease in the Remgro share price will require the number of shares to be delivered to be 664 651 shares and 385 786 shares, respectively.

 
 

If it is assumed that all awards made under the CSP vest on 1 July 2023 in full, Remgro will have to deliver 3 053 129 shares in order to settle its obligations.

 

 

 

On 30 June 2023 Remgro held sufficient treasury shares to settle its obligations to deliver shares to LTI participants.

 

Scenarios of possible total remuneration outcomes

The following illustrations depict the pay mix and the possible remuneration outcomes for the CEO, CFO and the prescribed officer average at minimum, on-target and stretch levels.

 

Element

 

Minimum

 
 

On-target

 
 

Stretch

 
 
               
               
  TGP 

TGP for 2024

 
 

 

 
     
  LTI 

Nil

 
 

The number of instruments granted in the 2023 financial year (in respect of the 2022 award) that will vest if target performance (50%) is achieved, multiplied by the fair value (on grant date).

 
  The number of instruments granted in the 2023 financial year (in respect of the 2022 award) that will vest if full performance (100%) is achieved, multiplied by the face value (on grant date).   
               


Malus and Clawback Policy

The Malus and Clawback Policy applies from 1 July 2021 to all new LTI awards.

The committee, in its discretion, may, in terms of the Malus and Clawback Policy, apply Malus and/or Clawback mechanisms to the LTI awards where a trigger event as provided for in the policy has occurred. Malus is applied to reduce awards where the trigger event is discovered before vesting or settlement of an award, whereas Clawback is used to recoup all or a portion of settled awards where a trigger event is discovered within three years post-vesting or settlement.

Trigger events include but are not limited to circumstances where any one or more of the following events have occurred:

  • It has been discovered that participating employee(s) has committed any act of fraud or dishonesty, in the scope and course of his employment or directorship, or otherwise involving a member of the Group or its affairs and which has or is likely to have an effect on the financial results or financial statements of any member of the Group or on any other measurable under the short-term and long-term incentive;
  • It has been discovered that participating employee(s), were involved in the falsification or misrepresentation of financial/ management information, financial results or financial statements of any member of the Company;
  • Any information that was used by the Board in order to determine or calculate a payment, award, benefit, allocation or grant or the vesting or settlement thereof was erroneous, inaccurate or misleading as a result of fraudulent or dishonest actions or circumstances that are directly attributable to any participating employee, or as a result of actions or circumstances that could have been avoided through reasonable care on the part of any participating employee;
  • Any information emerges that was not known to or considered at the time of making a decision regarding the payment, award, benefit, allocation or grant or the vesting or settlement thereof which, in the opinion of the Board, would have affected the Board’s decision and such information was not known to or considered at such time as a result of fraudulent or dishonest actions or circumstances that are directly attributable to any participating employee or as a result of actions or circumstances that could have been avoided through reasonable care on the part of any participating employee;
  • Any member of the Group has:
    • Been subject to regulatory investigation as a result of a breach of any laws, rules or codes of conduct applicable to it or the standards reasonably expected of it; or
    • Suffered in the opinion of the Board, considerable reputational, in either case as a result of fraudulent or dishonest actions or circumstances that are directly attributable to participating employees or as a result of actions or circumstances that could have been avoided by the reasonable actions of participating employees.

Executive employment contracts

Executive directors and members of the Management Board do not have fixed-term contracts, but are employed in terms of the Company’s standard contract of employment applicable to all employees. 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. Upon termination of employment, any payments made to employees will be as required in terms of legislation, and the consequences in respect of unexercised SARs and/or unvested CSP awards will be governed by the rules of the SAR Plan (or previous SAR Scheme) and CSP based on the reasons for the termination of employment.

Non-executive directors’ remuneration

Independent non-executive directors

Independent non-executive directors do not have any employment contracts, do not receive any benefits associated with permanent employment and do not participate in the Company’s LTI plans.

Furthermore, they are categorised as independent on the basis that the Board concludes that they have no interest, position, association or relationship which, judged from the perspective of a reasonable and informed third party, is likely to influence unduly or cause bias in decision-making in the best interest of the Company.

The independence of independent non-executive directors is reviewed annually and the independence of non-executive directors, who have served on the Board for more than nine years, is subject to a rigorous review by the Board. The Board, led by the Lead Independent Director, considered the independence of the independent non-executive directors, and is satisfied with their independence, including the independence of Messrs F Robertson (appointed 28 March 2001), M Morobe (appointed 18 June 2007), N P Mageza (appointed 4 November 2009) and P J Moleketi (appointed 4 November 2009) who each has served on the Remgro Board for more than nine years. Based on an evaluation of the aforementioned directors, there is no evidence of any circumstances or relationships that will impair their judgement, and the Board is satisfied that their independence is in no way affected by their length of service.

Independent non-executive directors are paid a fixed annual Board fee. Committee fees are also determined on a fixed annual basis. The fee structure is reviewed annually on 1 July. During the year under review the committee commissioned a comprehensive and bespoke survey amongst comparable companies based on inter alia, turnover, total assets, profit before tax, earnings before EBIT or EBITDA and/or market capitalisation. The committee considered the median fees of the comparator companies based on an annual fee and fee per meeting basis and compared against the number of committee meetings attended per annum. Non-executive director fees are approved by shareholders at the Company’s AGM by special resolution prior to payment. Remgro also pays for all travelling and accommodation expenses reasonably and properly incurred in order to attend meetings.

Non-independent non-executive directors

Messrs J P Rupert, A E Rupert, P J Neethling and J Malherbe are regarded as non-independent non-executive directors.

The Chairman, Messrs A E Rupert and P J Neethling receive no emoluments or fees from Remgro, whilst Mr J Malherbe receives the approved annual Board and committee fees paid to independent non-executive directors.

As in the case of independent non-executive directors, these directors do not participate in the Company’s LTI plans.

The proposed fee structure, based on the outcome of the bespoke NED fee survey and payable to non-executive directors for the year ending 30 June 2024 is presented in the table above. Also see Special Resolution Number 1 in the Notice to shareholders.

Type of fee (Rand) Current fee 
for the 
year ended 
30 June 2023 
Proposed fee 
for the 
year ending 
30 June 2024(1) 
% Change 
Board member  413 400  445 000  7.6% 
Chairman of the Audit and Risk Committee   340 000  361 000  6.2% 
Member of the Audit and Risk Committee   168 800  180 000  6.6% 
Member of the Remuneration and Nomination Committee  75 000  80 000  6.7% 
Chairman of the Social and Ethics Committee  137 400  175 000  27.6% 
Member of the Social and Ethics Committee  75 000  95 000  26.7% 
Chairman of Investment Committee  –  146 000  – 
Member of Investment Committee  –  80 000  – 
Chairman of Valuation Committee  –  146 000  – 
Member of Valuation Committee  –  80 000  – 
Chairman of Strategic ESG Committee  –  146 000  – 
Member of Strategic ESG Committee  –  80 000  – 
Meeting fee for ad hoc Committees  31 800  32 000  0.6% 
      
Fees are excluding VAT. 

  1. For the financial year ending on 30 June 2024, fees paid only for attendance per meeting of the subcommittees of the Board would be discontinued. Instead, subcommittees chairs and members would receive a fixed fee (as set out in the table above). This change would bring the director fee structure of the Company in line with that of its main competitors.
 


Shareholder engagement and non‑binding advisory vote

The Remuneration Policy and Remuneration Implementation Report are respectively tabled for separate non-binding advisory votes by the shareholders at each AGM.

The committee will engage with shareholders in the event of a 25% or more dissenting vote on either or both the Remuneration Policy and Remuneration Implementation Report. In that event, the Company will, in its voting results announcement provide for (1) an invitation to dissenting shareholders to engage with the Company, and (2) the manner and timing of such engagement. In this regard the Company intends to (1) invite the dissenting shareholders to provide the Company with their written submissions as to why they voted against the Remuneration Policy or Remuneration Implementation Report, (2) address the legitimate and reasonable objections of dissenting shareholders, and (3) report back to the dissenting shareholders. If appropriate and practical, the Company may engage with dissenting shareholders either individually or collectively at meetings called for that purpose. Other methods of shareholder engagement may include conference calls, emails and investor roadshows.

Part 3: Remuneration Implementation Report

Remgro Limited Remuneration Implementation Report

The Remuneration Implementation Report provides details on how Remgro implemented its Remuneration Policy during the 2023 financial year (the information here was audited). This Remuneration Implementation Report will be put to a non-binding advisory vote by shareholders at the next AGM on 4 December 2023.

Fixed remuneration

During the year under review, the executive directors and other members of the Management Board and senior executives received an average salary increase of 5.80%. Management employees received an average increase of 6.00% while non-management level employees received average increases of between 6.25% and 6.50% dependent on their level in the company

Short-term incentives outcome

Remgro’s Remuneration Policy does not provide for any short- term incentives, therefore no outcomes are reported in terms of this.

Long-term incentives outcome

The performance conditions for the December 2022 awards with a performance period from 1 July 2022 to 30 June 2025 are set out below.

Performance measure

 

Weight

 

Threshold (vesting 30%)(1)

 

On-target (vesting 50%)(1)

 

Stretch (vesting 100%)(1)

 

INAV

 

55%

 

Year one INAV plus CPI over three financial years

 

Year one INAV plus the 3 – 5 year SA Long bond rate over three financial years

 

Year one INAV plus the 3 –5 year SA Long bond rate plus 5% over three financial years

 

Free cash flow (FCF)

 

25%

 

Year one FCF plus CPI over three financial years

 

n/a

 

Year one FCF plus CPI plus 2.0% over three financial years

 

ESG

 

20%

 

The following to be achieved by 31 December 2023:

  • Influence 4 of the 9 (c.44%)(2) of identified investee companies) to have an ESG-focused Board (or similar) subcommittee and committee terms of reference and a formalised ESG strategy and updated remuneration policies embedding ESG principles.(3)
  • Appoint provider(s) to measure critical environmental measures, such as carbon emissions, across the identified investee companies to determine baseline measure and inform aspirational environmental goal(s)
 

The following needs to be achieved by 30 June 2024:

  • Influence 6 of the 9 (c.67%)(2) of identified investee companies) to have an ESG-focused Board (or similar) subcommittee and committee terms of reference and a formalised ESG strategy and updated remuneration policies embedding ESG principles.(3)
 

The following needs to be achieved by 30 June 2025:

  • Influence 9 of the 9 (100%)(2) of identified investee companies) to have an ESG-focused Board (or similar) subcommittee and committee terms of reference and a formalised ESG strategy and updated remuneration policies embedding ESG principles.(3)
  • Provide shareholders with a report on the Company’s ESG progress in relation to:(4)
    • each identified investee company’s progress,
    • calculating its greenhouse gas emissions, and
    • disclosing the aggregate baseline greenhouse gas emissions for identified companies.
 


  1. For performance between these points linear vesting will apply.
  2. The number of companies can change over time because of corporate activities. Strategy remains focused on around 80% of INAV.
  3. Through these targets the Company will influence proper governance, reporting and measurements of ESG activities.
  4. To update the Company ESG framework by June 2026 to include medium-, and long-term aspirations for the aggregated Company greenhouse gas emissions.


The performance outcomes for the 2020 LTI award, with a performance period from 1 July 2020 to 30 June 2023, are set out below.

As communicated in our 2022 report, the 2019 and 2020 LTI award is the first award which incorporates ESG performance measures. These measures take the form of qualitative ESG milestones, aimed at driving the momentum and success of our ESG journey, and primarily focused on governance, risk and strategic investment decisions as well as portfolio impact.

Financial

 

Performance
measure

 
 

Weight

 
 

Base
measure
(June
2020)

 
 

Threshold
(vesting 30%)

 
 

On-target
(vesting 50%)

 
 

Stretch
(vesting 100%)

 
 

Actual 
measure 
(June
2023) 

 
 

Actual 
vesting 

 
 
                     
                                 
  INAV
Performance
hurdles and
outcome
(Rand per share)
          Year one INAV plus CPI over three financial years    Year oneINAV plus the 3 – 5 year SA
Longbond rate over three financial years 
  Year one INAV plus the 3 – 5 year SA Longbond rate plus 5% over three financial years           
      55%    153.53(1)    179.86    193.64    221.79    248.47    100%   
  FCF
Performance
hurdles and
outcome
(cents per share)
            Year one FCF plus CPI over three financial years    n/a    Year one FCF plus CPI plus 1.25% over three financial years             
      25%    391.00(1)    1 290.70    n/a    1 322.40    953.10    0%   
                                 

  1. During the June 2022 year, the INAV and FCF bases of R154.47 and 396.2 cents per share (cps) were adjusted to R153.53 and 391.0 cps, respectively following the unbundling of Grindrod Limited shares.

Non-financial – ESG

 

Performance
measure

 
 

Weight

 
 

Threshold
(vesting 30%)

 
 

On-target
(vesting 50%)

 
 

Stretch
(vesting 100%)

 
 
                     
                     
  ESG   

20%

 
 

The following needs to be achieved by December 2021:

  • Amend all committee and Board mandates to include ESG focus.

  • Establish an Operational ESG Committee (subcommittee of the Management Board) to provide direction and oversight with regards to the ESG strategy.

  • Establish a Strategic ESG Committee (subcommittee of the Remgro Board) to provide strategic direction and overall oversight of the Remgro Group ESG strategy and activities.

  • Develop and approve mandates and terms of references for these committees to ensure they operate efficiently and to enable the Remgro ESG focus.

 
 

The following needs to be achieved by 30 June 2022:

  • Identify and engage with external expertise to develop a strategic ESG framework and to establish, amongst others, what environmental areas Remgro will focus on (i.e. water, carbon footprint, plastic, etc.), prepare an ESG footprint of Remgro’s investee companies, establish measurable targets and stretching goals and identify how to communicate our ESG intent to the market.

  • To develop an ESG investment business case framework to be used when considering new investments. This would aim to articulate any possible industries/ activities Remgro would not invest into and provide possible investments with a framework of what they would need to comply with either before investing or within a certain timeframe after investing.

  • Ready to present specific ESG targets and, base line measures for selected targets and threshold and stretch performance hurdles for each target at the November 2022 Remgro Remuneration and Nomination Committee meeting.

  •  
 

The following needs to be achieved by 31 December 2022:

  • Influence portfolio impact at subsidiary level through ensuring key subsidiary companies to have ESG targets and KPIs for LTI and/ or STI plans at executive level.

  • Stretch can only be achieved if KPIs at threshold and target were achieved.

 
 
  Actual
performance 
     

100% achieved

 
 

100% achieved

 
 

90% achieved

 
 
 

LTI vesting
(non-financial)

 
               18%   
                     


Total vesting outcome:

 

LTI vesting outcome
(financial)

 
 

LTI vesting outcome
(non-financial)

 
 

LTI vesting outcome (total)

 
 
             
             
  55%   

18%

 
 

73%

 
 
             


Long-term incentives summary

The tables below provide information on a director and prescribed officer basis of SARs granted and accepted during the year and the indicative value of SARs not yet exercised (outstanding SARs). It also illustrates the cash value of SARs exercised during the year.

Share appreciation rights (SARs)
Directors
Participant Offer 
date(1) 
Offer 
price(2) 
(Rand) 
Number 
of SARs 
offered 
and 
accepted 
Fair 
value 
of SARs 
on offer 
date 
(R’000) 
Balance 
of SARs 
accepted 
as at 
30 June 
2022 
Adjusted 
offer 
price(3) 
(Rand) 
SARs 
accepted/ 
(exercised 
or expired) 
during 
the year 
Share 
price on 
exercise 
date 
(Rand) 
Cash 
value 
of SARs 
exercised 
during 
the year(4)  
(R’000) 
Balance 
of SARs 
accepted 
as at 
30 June 
2023(5) 
Fair 
value 
of SARs 
as at 
30 June 
2023(6) 
(R’000) 
Executive                       
J J Durand  29-Nov-12(7)  147.25  271 258  10 763  271 258  90.97        271 258  15 615 
  04-Dec-13(7)  191.70  93 128  5 064  93 128  127.80  (93 128) 144.47  1 925  –  – 
  26-Nov-14(7)  253.53  108 468  7 442  108 468  160.29        108 468  386 
  24-Nov-15(7)  272.00  192 676  15 591  192 676  15 591  192 676  166.08    192 676  414 
  01-Dec-16  209.11  150 872  10 554  150 872  122.38  (150 872) 144.47  3 333  –  – 
  14-Dec-17  206.35  132 309  9 705  132 309  114.92        132 309  5 637 
  05-Dec-20(8)  93.82  235 427  6 111  235 427  89.21  (68 272)     167 155  6 600 
  05-Dec-20  93.82  235 454  6 631  235 454  89.69        235 454  9 733 
  05-Dec-21  126.99  181 379  7 853  181 379  121.63        181 379  6 251 
  05-Dec-22  141.64  172 168  8 509  –  141.64  172 168      172 168  5 548 
                       
M Lubbe  29-Nov-12(7)  147.25  13 961  554  13 961  90.97        13 961  804 
  04-Dec-13(7)  191.70  7 444  405  7 444  127.80  (7 444) 147.57  177  –  – 
  26-Nov-14(7)  253.53  4 011  275  4 011  160.29        4 011  14 
  24-Nov-15(7)  272.00  8 036  650  8 036  166.08        8 036  17 
  01-Dec-16  209.11  65 632  4 591  65 632  122.38  (65 632) 147.57  1 653  –  – 
  14-Dec-17  206.35  15 481  1 136  15 481  114.92        15 481  660 
  05-Dec-20(8)  93.82  39 078  1 014  39 078  89.21   (11 331)     27 747  1 096 
  05-Dec-20  93.82  46 448  1 308  46 448  89.69        46 448  1 920 
  05-Dec-21  126.99  35 796  1 550  35 796  121.63        35 796  1 234 
  05-Dec-22  141.64  37 780  1 867  –  141.64  37 780      37 780  1 218 
                       
N J Williams  29-Nov-12(7)  147.25  81 901  3 250  81 901  90.97        81 901  4 715 
  04-Dec-13(7)  191.70  22 221  1 208  22 221  123.80  (22 221) 147.57  528  –  – 
  26-Nov-14(7)  253.53  16 430  1 127  16 430  160.29        16 430  58 
  24-Nov-15(7)  272.00  27 492  2 225  27 492  166.08        27 492  59 
  01-Dec-16  209.11  98 716  6 905  98 716  122.38  (98 716) 147.57  2 487  –  – 
  14-Dec-17  206.35  55 677  4 084  55 677  114.92        55 677  2 372 
  05-Dec-20(8)  93.82  72 103  1 871  72 103  89.21    (20 908)     51 195  2 021 
  05-Dec-20  93.82  72 124  2 031  72 124  89.69        72 124  2 981 
  05-Dec-21  126.99  55 568  2 406  55 568  121.63        55 568  1 915 
  05-Dec-22  141.64  58 623  2 897  –  141.64   58 623      58 623  1 889 
Total          2 339 090    (269 953)   10 103  2 069 137  73 157 
                       

  1. Unless otherwise indicated, one-third of the SARs are exercisable after the third anniversary of the grant date, an additional third after the fourth anniversary of the grant date and the remainder after the fifth anniversary of the grant date. All SARs must be exercised within seven years after the grant date, upon which date unexercised SARs lapse.
  2. Offer price of SARs granted before December 2018 is equal to the face value on grant date. Offer price of SARs granted from 5 December 2018 onwards is the five-day VWAP on offer date.
  3. In terms of the rules of the share schemes, the offer price of SARs that were awarded prior to unbundlings, rights issues, special dividends, etc., was reduced to ensure that the participants were placed in substantially the same position as they were prior to such corporate actions. During the 2023 financial year offer prices were reduced by between R3.25 and R5.36 (depending on the offer date) as a result of the Grindrod Unbundling.
  4. This refers to the increase in value of the SARs from the offer date to the date of exercise.
  5. SARs offered from 5 December 2018 onwards, have performance conditions and reflect the number of SARs as if performance conditions were fully met, unless SARs were forfeited.
  6. Fair value was calculated using the standard binomial pricing model. The estimated vesting percentage of the 2018 awards onwards is considered to be the on-target performance level of 60%.
  7. The expiry dates of these awards were extended to November 2023. As an alternative option to the 2012 SAR awards, a special award of CSPs was also made to employees. Should the employee choose to exercise the 2012 SAR award, the special CSP award will lapse.
  8. These awards relate to the 2019 award not made and will vest in one-thirds on the second, third and fourth anniversaries of the grant date, respectively. The performance conditions of the 2019 awards were met by 71% and consequently 29% of the SARs were forfeited.
 
Participant Offer 
date(1) 
Offer 
price(2) 
(Rand) 
Number 
of SARs 
offered 
and 
accepted 
Fair 
value 
of SARs 
on offer 
date 
(R’000) 
Balance 
of SARs 
accepted 
as at 
30 June 
2021 
Adjusted 
offer 
price(3 )
(Rand) 
SARs 
accepted/ 
(exercised 
or expired) 
during 
the year 
Share 
price on 
exercise 
date 
(Rand) 
Cash 
value 
of SARs 
exercised 
during 
the year(4)  
(R’000) 
Balance 
of SARs 
accepted 
as at 
30 June 
2022(5) 
Fair 
value 
of SARs 
as at 
30 June 
2022(6) 
(R’000) 
Executive                       
J J Durand  29-Nov-12(7)  147.25  271 258  10 763  271 258  94.22       271 258  10 614 
  04-Dec-13(7)  191.70  93 128  5 064  93 128  127.40       93 128  1 597 
  26-Nov-14(7)  253.53  108 468  7 442  108 468  164.57       108 468  535 
  24-Nov-15(7)  272.00  192 676  15 591  192 676  170.38       192 676  823 
  01-Dec-16  209.11  150 872  10 554  150 872  125.95       150 872  2 561 
  14-Dec-17  206.35  132 309  9 705  132 309  118.86       132 309  2 918 
  05-Dec-18(8)  205.07  87 135  5 436  87 135  112.38  (87 135)    –  – 
  05-Dec-20(9)  93.82  235 427  6 111  –  93.82       235 427  7 415 
  05-Dec-20  93.82  235 454  6 631  –  93.82       235 454  8 300 
  05-Dec-21  126.99  181 379  7 853  –  126.99  181 379     181 379  5 362 
                       
M Lubbe  29-Nov-12(7)  147.25  13 961  554  13 961  94.22       13 961  546 
  04-Dec-13(7)  191.70  7 444  405  7 444  127.40       7 444  128 
  26-Nov-14(7)  253.53  4 011  275  4 011  164.57       4 011  20 
  24-Nov-15(7)  272.00  8 036  650  8 036  170.38       8 036  34 
  01-Dec-16  209.11  65 632  4 591  65 632  125.95       65 632  1 114 
  14-Dec-17  206.35  15 481  1 136  15 481  118.86       15 481  341 
  05-Dec-18(8)  205.07  14 648  914  14 648  112.38  (14 648)    –  – 
  05-Dec-20(8)  93.82  39 078  1 014  –  93.82       39 078  1 231 
  05-Dec-20  93.82  46 448  1 308  46 448  93.82       46 448  1 637 
  05-Dec-21  126.99  35 796  1 550  126.99  35 796     35 796  1 058 
                       
N J Williams  29-Nov-12(7)  147.25  81 901  3 250  81 901  94.22       81 901  3 205 
  04-Dec-13(7)  191.70  22 221  1 208  22 221  127.40       22 221  381 
  26-Nov-14(7)  253.53  16 430  1 127  16 430  164.57       16 430  81 
  24-Nov-15(7)  272.00  27 492  2 225  27 492  170.38       27 492  117 
  01-Dec-16  209.11  98 716  6 905  98 716  125.95       98 716  1 675 
  14-Dec-17  206.35  55 677  4 084  55 677  118.86       55 677  1 228 
  05-Dec-18(8)  205.07  28 465  1 776  28 465  112.38  (28 465)    –  – 
  05-Dec-20(9)  93.82  72 103  1 871  72 103  93.82       72 103 
  05-Dec-20  93.82  72 124  2 031  –  93.82       72 124  2 542 
  05-Dec-21  126.99  55 568  2 406  –  126.99  55 568     55 568  1 643 
Total          2 196 595   142 495   –  2 339 090  59 377 
                      

  1. Unless otherwise indicated, one-third of the SARs are exercisable after the third anniversary of the grant date, an additional third after the fourth anniversary of the grant date and the remainder after the fifth anniversary of the grant date. All SARs must be exercised within seven years after the grant date, upon which date unexercised SARs lapse.
  2. Offer price of SARs granted before December 2018 is equal to the face value on grant date. Offer price of SARs granted from December 2018 onwards is the five-day VWAP on offer date.
  3. In terms of the rules of the share schemes, the offer price of SARs that were awarded prior to unbundlings, rights issues, special dividends, etc., was reduced to ensure that the participants were placed in substantially the same position as they were prior to such corporate actions.
  4. This refers to the increase in value of the SARs of the indicated participants from the offer date to the date of exercise.
  5. SARs offered from December 2018 onwards, have performance conditions and reflect the number of SARs as if performance conditions were fully met.
  6. Fair value was calculated using the standard binomial pricing model. The estimated vesting percentage of the 2018 awards and onwards is considered to be the on-target performance level of 60%.
  7. The expiry dates of these awards were extended to November 2023. As an alternative option to the 2012 SAR awards, a special award of CSPs was also made to employees. Should the employee choose to exercise his 2012 SAR award, the special CSP award will lapse.
  8. The performance conditions of the 2018 awards were not met and the SARs were forfeited.
  9. These awards relate to the 2019 award not made and will vest in one-thirds on the second, third and fourth anniversaries of the grant date, respectively.
Prescribed officers
Participant Offer 
date(1) 
Offer
  price(2) 
(Rand) 
Number 
of SARs 
offered 
and 
accepted 
Fair 
value 
of SARs 
on offer 
date 
(R’000) 
Balance 
of SARs 
accepted 
as at 
30 June 
2022 
Adjusted 
offer 
price(3) 
(Rand) 
SARs 
accepted/ 
(exercised 
or expired) 
during 
the year 
Share 
price on 
exercise 
date 
(Rand) 
Cash 
value 
of SARs 
exercised 
during 
the year(4) 
(R’000) 
Balance 
of SARs 
accepted 
as at 
30 June 
2023(5) 
Fair 
value 
of SARs 
as at 
30 June 
2023(6) 
(R’000) 
P R Louw  29-Nov-12(7)  147.25  22 646  899  22 646  90.97  (22 646) 146.18  1 250  –  – 
 04-Dec-13(7)  191.70  12 944  704  12 944  123.80  (12 944) 146.18  290  –  – 
 26-Nov-14(7)  253.53  5 952  408  5 952  160.29        5 952  21 
 24-Nov-15(7)  272.00  9 497  768  9 497  166.08        9 497  20 
 01-Dec-16  209.11  91 120  6 374  91 120  122.38  (91 120) 146.18  2 169  –  – 
 14-Dec-17  206.35  20 301  1 489  20 301  114.92        20 301  865 
 05-Dec-20(8)  93.82  46 428  1 205  46 428  89.21   (13 464)     32 964  1 302 
 05-Dec-20  93.82  46 448  1 308  46 448  89.69        46 448  1 920 
 05-Dec-21  126.99  35 796  1 550  35 796  121.63        35 796  1 234 
 05-Dec-22  141.64  37 780  1 867  –  141.64  37 780      37 780  1 218 
                      
P J Uys  02-Apr-13(7)  183.15  218 400  10 519  218 400  118.16        218 400  6 919 
 04-Dec-13(7)  191.70  3 325  181  3 325  123.80        3 325  88 
 26-Nov-14(7)  253.53  14 774  1 014  14 774  160.29        14 774  53 
 24-Nov-15(7)  272.00  11 533  933  11 533  166.08        11 533  25 
 01-Dec-16  209.11  91 463  6 398  91 463  122.38        91 463  2 542 
 14-Dec-17  206.35  85 936  6 303  85 936  114.92        85 936  3 661 
 05-Dec-20(8)  93.82  88 088  2 286  88 088  89.21   (25 543)     62 545  2 470 
 05-Dec-20  93.82  88 108  2 481  88 108  89.69        88 108  3 642 
 05-Dec-21  126.99  67 853  2 938  67 853  121.63        67 853  2 339 
 05-Dec-22  141.64  71 565  3 537  –  141.64  71 565      71 565  2 306 
Total          960 612    (56 372)   3 709  904 240  30 625 
                      
  1. Unless otherwise indicated, one-third of the SARs are exercisable after the third anniversary of the grant date, an additional third after the fourth anniversary of the grant date and the remainder after the fifth anniversary of the grant date. All SARs must be exercised within seven years after grant date, upon which date unexercised SARs lapse.
  2. Offer price of SARs granted before December 2018 is equal to the face value on grant date. Offer price of SARs granted from 5 December 2018 onwards is the five-day VWAP on offer date.
  3. In terms of the rules of the share schemes, the offer price of SARs that were awarded prior to unbundlings, rights issues, special dividends, etc., was reduced to ensure that the participants were placed in substantially the same position as they were prior to such corporate actions. During the 2023 financial year offer prices were reduced by between R3.25 and R5.36 (depending on the offer date) as a result of the Grindrod Unbundling.
  4. This refers to the increase in value of the SARs from the offer date to the date of exercise.
  5. SARs offered from 5 December 2018 onwards, have performance conditions and reflect the number of SARs as if performance conditions were fully met, unless SARs were forfeited.
  6. Fair value was calculated using the standard binomial pricing model. The estimated vesting percentage of the 2018 awards onwards is considered to be the on-target performance level of 60%.
  7. The expiry dates of these awards were extended to November 2023. As an alternative option to the 2012 SAR awards, a special award of CSPs was also made to employees. Should the employee choose to exercise the 2012 SAR award, the special CSP award will lapse.
  8. These awards relate to the 2019 award not made and will vest in one-thirds on the second, third and fourth anniversaries of the grant date, respectively. The performance conditions of the 2019 awards were met by 71% and consequently 29% of the SARs were forfeited.
Participant Offer 
date(1) 
Offer 
price(2) 
(Rand) 
Number 
of SARs 
offered 
and 
accepted 
Fair 
value 
of SARs 
on offer 
date 
(R’000) 
Balance 
of SARs 
accepted 
as at 
30 June 
2021 
Adjusted 
offer 
price(3) 
(Rand) 
SARs 
accepted/ 
(exercised 
or expired) 
during 
the year 
Share 
price on 
exercise 
date 
(Rand) 
Cash 
value 
of SARs 
exercised 
during 
the year(4) 
(R’000) 
Balance 
of SARs 
accepted 
as at 
30 June 
2022(5) 
Fair 
value 
of SARs 
as at 
30 June 
2022(6) 
(R’000) 
P R Louw  29-Nov-12(7)  147.25  22 646  899  22 646  94.22        22 646  886 
  04-Dec-13(7)  191.70  12 944  704  12 944  127.40        12 944  222 
  26-Nov-14(7)  253.53  5 952  408  5 952  164.57        5 952  29 
  24-Nov-15(7)  272.00  9 497  768  9 497  170.38        9 497  41 
  01-Dec-16  209.11  91 120  6 374  91 120  125.95        91 120  1 546 
  14-Dec-17  206.35  20 301  1 489  20 301  118.86        20 301  448 
  05-Dec-18(8)  205.07  17 881  1 116  17 881  112.38  (17 881)     –  – 
  05-Dec-20(9)  93.82  46 428  1 205  46 428  93.82        46 428  1 462 
  05-Dec-20  93.82  46 448  1 308  46 448  93.82        46 448  1 637 
  05-Dec-21  126.99  35 796  1 550  –  126.99  35 796      35 796  1 058 
                       
P J Uys  02-Apr-13(7)  183.15  218 400  10 519  218 400  121.67        218 400  4 732 
  04-Dec-13(7)  191.70  3 325  181  3 325  127.40        3 325  57 
  26-Nov-14(7)  253.53  14 774  1 014  14 774  164.57        14 774  128 
  24-Nov-15(7)  272.00  11 533  933  11 533  170.38        11 533  49 
  01-Dec-16  209.11  91 463  6 398  91 463  125.95        91 463  1 552 
  14-Dec-17  206.35  85 936  6 303  85 936  118.86        85 936  1 895 
  05-Dec-18(8)  205.07  35 822  2 235  35 822  112.38  (35 822)     –  – 
  05-Dec-20(9)  93.82  88 088  2 286  88 088  93.82        88 088  2 774 
  05-Dec-20  93.82  88 108  2 481  88 108  93.82        88 108  3 106 
  05-Dec-21  126.99  67 853  2 938  –  126.99  67 853      67 853  2 006 
Total           910 666    49 946    –  960 612  23 573 
                      

  1. Unless otherwise indicated, one-third of the SARs are exercisable after the third anniversary of the grant date, an additional third after the fourth anniversary of the grant date and the remainder after the fifth anniversary of the grant date. All SARs must be exercised within seven years after the grant date, upon which date unexercised SARs lapse.
  2. Offer price of SARs granted before December 2018 is equal to the face value on grant date. Offer price of SARs granted from December 2018 onwards is the five-day VWAP on offer date.
  3. In terms of the rules of the share schemes, the offer price of SARs that were awarded prior to unbundlings, rights issues, special dividends, etc., was reduced to ensure that the participants were placed in substantially the same position as they were prior to such corporate actions
  4. This refers to the increase in value of the SARs from the offer date to the date of exercise.
  5. SARs offered from December 2018 onwards, have performance conditions and reflect the number of SARs as if performance conditions were fully met.
  6. Fair value was calculated using the standard binomial pricing model. The estimated vesting percentage of the 2018 awards and onwards is considered to be the on-target performance level of 60%.
  7. The expiry dates of these awards were extended to November 2023. As an alternative option to the 2012 SAR awards, a special award of CSPs was also made to employees. Should the employee choose to exercise the 2012 SAR award, the special CSP award will lapse.
  8. The performance conditions of the 2018 awards were not met and the SARs were forfeited.
  9. These awards relate to the 2019 award not made and will vest in one-thirds on the second, third and fourth anniversaries of the grant date, respectively.

Long-term incentives summary

The tables below provide information on a director and prescribed officer basis of CSPs granted and accepted during the year. It also illustrates the cash value of CSPs vested during the year.

Conditional Share Plan shares (CSPs)

Directors
Participant  Offer 
date(1) 
Offer 
price(2)  
(Rand) 
Number 
of CSPs 
offered 
and 
accepted 
Fair 
value 
of CSPs 
on offer 
date 
(R’000) 
Balance 
of CSPs 
accepted 
as at 
30 June 
2022 
CSPs 
accepted/ 
(exercised 
or expired) 
during the 
year 
Additional
CSPs from 
Grindrod
Unbundling(3) 
Additional 
CSPs from 
dividends(4) 
CSPs 
exercised 
during 
the year 
Cash 
value of 
CSPs 
vesting 
in year(5) 
(R’000) 
Balance 
of CSPs 
accepted 
as at 
30 June 
2023(6) 
Fair 
value 
of CSPs 
as at 
30 June 
2023(7) 
(R’000) 
Executive                          
J J Durand  05-Dec-18(8)  93.82  235 427  20 366  235 427  (69 766) 5 156  996  (57 937) 8 206  113 876  10 047 
  05-Dec-20  93.82  235 427  19 655  235 454    5 157        240 611  21 229 
  05-Dec-20(9)  93.82  95 672  8 728  95 672    2 096  855      98 623  14 503 
  05-Dec-21  126.99  181 379  20 747  181 379    3 973        185 352  16 354 
  05-Dec-22  141.64  172 168  23 623  –   172 168          172 168  15 190 
                         
M Lubbe  05-Dec-18(8)  93.82  39 078  3 380  39 078  (11 577) 856  166  (9 619) 1 362  18 904  1 668 
  05-Dec-20(9)  93.82  46 448  3 877  46 448    1 018        47 466  4 188 
  05-Dec-20(9)  93.82  4 924  449  4 924    108  45      5 077  747 
  05-Dec-21  126.99  35 796  4 094  35 796  784          36 580  3 227 
  05-Dec-22  141.64  37 780  5 184  –  37 780          37 780  3 333 
                         
N J Williams  05-Dec-18(8)  93.82  72 103  6 237  72 103  (21 365) 1 580  306  (17 746) 2 514  34 878  3 077 
  05-Dec-20  93.82  72 124  6 021  72 124    1 580        73 704  6 503 
  05-Dec-20(9)  93.82  28 887  2 635  28 887    633  259      29 779  4 379 
  05-Dec-21  126.99  55 568  6 356  55 568  1 217        56 785  5 010 
  05-Dec-22  141.64  58 623  8 044  –  58 623        5 172  58 623 
Total           1 102 860  165 863  24 158  2 627  (85 302) 12 082  1 210 206  114 627 

  1. Unless otherwise indicated, one-third of the CSPs vest, after the third anniversary of the grant date, an additional third after the fourth anniversary of the grant date and the remainder after the fifth anniversary of the grant date.
  2. Offer price of CSPs granted is the five-day VWAP on offer date.
  3. As a result of the Grindrod Unbundling, additional CSPs, being a factor of 0.0219 of the CSPs held, were allocated during the 2023 financial year.
  4. Dividend equivalents accumulated and converted to shares upon vesting.
  5. This refers to the total value of the CSPs on vesting at the five-day VWAP of Remgro of R141.64.
  6. CSPs have performance conditions and reflect the number of CSPs as if performance conditions were fully met, unless CSPs were forfeited.
  7. Fair value was calculated using the standard binomial pricing model. The estimated vesting percentage is considered to be the on-target performance level of 60%. The special award of CSPs (refer below) does not have performance conditions.
  8. These awards relate to the 2019 award not made and will vest in one-thirds on the second, third and fourth anniversaries of the grant date, respectively.
  9. As an alternative to the 2012 SAR awards, this special award of CSPs was also made to employees. Should the employee choose to exercise the 2012 SAR award, this special CSP award will lapse.

Conditional Share Plan shares (CSPs)

Directors
Participant  Offer 
date(1) 
Offer 
price(2) 
(Rand) 
Number 
of CSPs 
offered 
and 
accepted 
Fair 
value 
of CSPs 
on offer 
date 
(R’000) 
Balance 
of CSPs 
accepted 
as at 
30 June 
2021 
CSPs 
accepted/ 
(exercised 
or expired) 
during the 
year 
Share 
price on 
vesting 
date(3) 
(Rand) 
Cash 
value of 
CSPs 
vesting 
in year(4) 
(R’000) 
Balance 
of CSPs 
accepted 
as at 
30 June 
2022(5, 6) 
Fair 
value 
of CSPs 
as at 
30 June 
2022(7) 
(R’000) 
Executive                     
J J Durand  05-Dec-18(8)  205.07  120 107  15 933  120 107  (120 107)    –  – 
 05-Dec-20(9)  93.82  235 427  20 366  235 427       235 427  17 970 
 05-Dec-20  93.82  235 454  19 655  235 454       235 454  17 644 
 05-Dec-20(10)  93.82  95 672  8 728  95 672       95 672  6 198 
 05-Dec-21  126.99  181 379  20 747  –  181 379     181 379  13 344 
                    
M Lubbe  05-Dec-18(8)  205.07  20 191  2 678  20 191  (20 191)    –  – 
 05-Dec-20(9)  93.82  39 078  3 380  39 078       39 078  2 983 
 05-Dec-20  93.82  46 448  3 877  46 448       46 448  3 481 
 05-Dec-20(10)  93.82  4 924  449  4 924       4 924  319 
 05-Dec-21  126.99  35 796  4 094  –   35 796     35 796  2 634 
                    
N J Williams  05-Dec-18(8)  205.07  39 237  5 205  39 237  (39 237)    –  – 
 05-Dec-20(9)  93.82  72 103  6 237  72 103       72 103  5 503 
 05-Dec-20  93.82  72 124  6 021  72 124       72 124  5 405 
 05-Dec-20(10)  93.82  28 887  2 635  28 887       28 887  1 871 
 05-Dec-21  126.99  55 568  6 356  –  55 568     55 568  4 088 
Total          1 009 652  93 208   –  1 102 860  81 440 
                    

  1. Unless otherwise indicated, one-third of the CSPs vest, after the third anniversary of the grant date, an additional third after the fourth anniversary of the grant date and the remainder after the fifth anniversary of the grant date.
  2. Offer price of CSPs granted is the five-day VWAP on offer date.
  3. Five-day VWAP of Remgro on vesting date.
  4. This refers to the total value of the CSPs on vesting.
  5. CSPs have performance conditions and reflect the number of CSPs as if performance conditions were fully met.
  6. Dividend equivalents will be accumulated and delivered in shares upon vesting.
  7. Fair value was calculated using the standard binomial pricing model. The estimated vesting percentage is considered to be the on-target performance level of 60%. The special award of CSPs (refer below) does not have performance conditions.
  8. The performance conditions of the 2018 awards were not met and the CSPs were forfeited.
  9. These awards relate to the 2019 award not made and will vest in one-thirds on the second, third and fourth anniversaries of the grant date, respectively.
  10. As an alternative to the 2012 SAR awards, this special award of CSPs was also made to employees. Should the employee choose to exercise the 2012 SAR award, this special CSP award will lapse.

Conditional Share Plan shares (CSPs)

Prescribed officers
Participant  Offer 
date(1) 
Offer 
price(2) 
(Rand) 
Number 
of CSPs 
offered 
and 
accepted 
Fair 
value 
of CSPs 
on offer 
date 
(R’000) 
Balance 
of CSPs 
accepted 
as at 
30 June 
2022 
CSPs 
accepted/ 
(exercised 
or expired) 
during the 
year 
Additional
CSPs from 
Grindrod
Unbundling(3) 
Additional 
CSPs from
dividends(4) 
CSPs 
exercised 
during 
the year 
Cash 
value of 
CSPs 
vesting 
in year(5) 
(R’000) 
Balance 
of CSPs 
accepted 
as at 
30 June 
2023(6)  
Fair 
value 
of CSPs 
as at 
30 June 
2023(7 )
(R’000) 
P R Louw  05-Dec-18(8)  93.82  46 428  4 016  46 428  (13 758) 1 017  197  (11 426) 1 618  22 458  1 981 
  05-Dec-20  93.82  46 428  3 877  46 448  1 018          47 466  4 188 
  05-Dec-20(9)  93.82  7 988  729  7 988    175  72  (8 235)   –  – 
  05-Dec-21  126.99  35 796  4 094  35 796    784        36 580  1 936 
  05-Dec-22  141.64  37 780  5 184  –  37 780        3 333  37 780 
                         
P J Uys  05-Dec-18(8)  93.82  88 088  7 620  88 0888  (26 101) 1 930  374  (21 681) 3 071  49 378  3 759 
  05-Dec-20  93.82  88 108  7 355  88 108    1 930        90 038  7 944 
  05-Dec-21  126.99  67 853  7 761  67 853    1 486        69 339  6 118 
  05-Dec-22  141.64  71 565  9 819  –  71 565          71 565  6 314 
Total           380 709  69 486  8 340  643  (41 342) 4 689  417 836  35 573 
                         

  1. Unless otherwise indicated, one-third of the CSPs vest, after the third anniversary of the grant date, an additional third after the fourth anniversary of the grant date and the remainder after the fifth anniversary of the grant date.
  2. Offer price of CSPs granted is the five-day VWAP on offer date.
  3. As a result of the Grindrod Unbundling, additional CSPs, being a factor of 0.0219 of the CSPs held, were allocated during the 2023 financial year.
  4. Dividend equivalents accumulated and converted to shares upon vesting.
  5. This refers to the total value of the CSPs on vesting at the five-day VWAP of Remgro of R141.64.
  6. CSPs have performance conditions and reflect the number of CSPs as if performance conditions were fully met, unless CSPs were forfeited.
  7. Fair value was calculated using the standard binomial pricing model. The estimated vesting percentage is considered to be the on-target performance level of 60%. The special award of CSPs (refer below) does not have performance conditions.
  8. These awards relate to the 2019 award not made and will vest in one-thirds on the second, third and fourth anniversaries of the grant date, respectively.
  9. As an alternative to the 2012 SAR awards, this special award of CSPs was also made to employees. Should the employee choose to exercise the 2012 SAR award, this special CSP award will lapse.
Participant  Offer 
date(1) 
Offer 
price(2) 
(Rand) 
Number 
of CSPs 
offered 
and 
accepted 
Fair 
value 
of CSPs 
on offer 
date 
(R’000)
Balance 
of CSPs 
accepted 
as at 
30 June 
2021 
CSPs 
accepted/ 
(exercised 
or expired) 
during the 
year 
Share 
price on 
vesting 
date(3) 
(Rand) 
Cash 
value of 
CSPs 
vesting 
in year(4) 
(R’000) 
Balance 
of CSPs 
accepted 
as at 
30 June 
2022(5, 6)  
Fair 
value 
of CSPs 
as at 
30 June 
2022(7) 
(R’000) 
P R Louw  05-Dec-18(8)  205.07  24 648  3 270  24 648  (24 648)     –  – 
  05-Dec-20(9)  93.82  46 428  4 016  46 428        46 428  3 544 
  05-Dec-20  93.82  46 448  3 877  46 448        46 448  3 481 
  05-Dec-20(10)  93.82  7 988  729  7 988        7 988  518 
  05-Dec-21  126.99  35 796  4 094  –  35 796     35 796  2 634 
                     
P J Uys  05-Dec-18(8)  205.07  49 378  6 550  49 378  (49 378)     –  – 
  05-Dec-20(9)  93.82  88 088  7 620  88 088        88 088  6 724 
  05-Dec-20  93.82  88 108  7 355  88 108        88 108  6 602 
  05-Dec-21  126.99  67 853  7 761  –  67 853      67 853  4 992 
Total           351 086  29 623    –  380 709  28 495 
                    

  1. Unless otherwise indicated, one-third of the CSPs vest, after the third anniversary of the grant date, an additional third after the fourth anniversary of the grant date and the remainder after the fifth anniversary of the grant date.
  2. Offer price of CSPs granted is the five-day VWAP on offer date.
  3. Five-day VWAP of Remgro on vesting date.
  4. This refers to the total value of the CSPs on vesting date.
  5. CSPs have performance conditions and reflect the number of CSPs as if performance conditions were fully met.
  6. Dividend equivalents will be accumulated and delivered in shares upon vesting.
  7. Fair value was calculated using the standard binomial pricing model. The estimated vesting percentage is considered to be the on-target performance level of 60%. The special award of CSPs (refer below) does not have performance conditions.
  8. The performance conditions of the 2018 awards were not met and the CSPs were forfeited.
  9. These awards relate to the 2019 award not made and will vest in one-thirds on the second, third and fourth anniversaries of the grant date, respectively.
  10. As an alternative to the 2012 SAR awards, this special award of CSPs was also made to employees. Should the employee choose to exercise the 2012 SAR award, this special CSP award will lapse.

Total remuneration (single figure)

Linking pay with the delivery of long-term shareholder value



The graph above illustrates the following:

1. 

LTI intrinsic value vested – The stacked columns represent the intrinsic value that vested (for SARs and CSPs) to the CEO as at the end of each reporting period for the last five years.

With regards to the SARs, it should be noted that the awards vesting in 2019 to 2020 had no performance conditions attached (other than the inherent condition for share price growth above the strike price) and as a result the vesting outcome was 100%. However, these awards were underwater as at the end of their respective financial years (i.e. the share price at year-end was below the strike price) and as a result the intrinsic value of these awards amount to R0 which resulted in no value vesting at the reporting date for these awards. The SARs vesting in years 2021 to 2023 had performance conditions attached and the vesting outcomes for these awards were 0%, 71% and 73% respectively. As a result in:

  • 2021: a value of R0 vested;
  • 2022: a value of R6.37 million vested (of which by 2023 two thirds has crystalised, with the remaining one third deferred for one more year); and
  • 2023: a value of R9.90 million vested (of which by 2023 one third has crystalised, with the remaining two thirds deferred for a further two more).

With regard to the CSPs, the first award of CSPs was made in 2018 and vested in 2021. The CSPs vesting outcomes in 2021 to 2023 were 0%, 71% and 73% respectively. As a result in:

  • 2021: a value of R0 vested;
  • 2022: a value of R22.94 million vested (of which by 2023 two thirds has crystalised, with the remaining one third deferred for one more year); and
  • 2023: a value of R27.35 million vested (of which by 2023 one third has crystalised, with the remaining two thirds deferred for two more years).

Please note that the SARs and CSPs vesting in 2022 were awarded in 2020 and as a result these had a reduced performance period of two years instead of three years. This is due to the fact that no awards were made in 2019 as a result of the impacts of Covid-19, and as a result these allocations were only made in 2020.

 
2. 

TSR performance over the performance period – Overlaid to the value vested graph is a line graph which represents the TSR CAGR performance outcome that was achieved during the performance period for each of the awards. As a result, for the awards vesting in years 2019 – 2021 & 2023 the TSR represents a three-year CAGR outcome, whereas due to the fact that the awards vesting in 2022 were only awarded in 2020 (as noted above), the TSR outcome for 2022 represents a two-year TSR CAGR in order to align with the performance period of the awards.

In interpreting the outcomes of the graph, it can be seen that there is alignment between the CEO vesting outcomes and shareholder value creation, as:

  • Where the TSR for the performance period is negative in years 2019 to 2021 no value of LTI was vested to the CEO; and
  • Where the TSR for the performance period is positive in 2022 (15.6%) and 2023 (14.0%) there is a positive vesting outcome for the CEO.
 

Total remuneration (single figure)

The tables below provide information on the single figure remuneration for executive directors and prescribed officers, which comprises a fixed annual amount, as well as the value of the shares vesting 12 months after year-end.

Executive directors

R’000  Fees  Salaries  Retirement 
fund 
Other 
benefits(1) 
Fixed 
 remuneration 
LTI(2)  Total 
30 June 2023                
J J Durand  413  12 819  2 625  442  16 299  23 490  39 789 
M Lubbe  413  2 807  639  456  4 315  4 272  8 587 
N J Williams  413  4 778  1 030  445  6 666  7 195  13 861 
Total  1 239  20 404  4 294  1 343  27 280  34 957  62 237 
30 June 2022                
J J Durand  390  12 107  2 479  419  15 395  34 957  25 077 
M Lubbe  390  2 647  602  431  4 070  9 682  5 653 
N J Williams  390  4 509  965  423  6 287  3 021  9 308 
Total  1 170  19 263  4 046  1 273  25 752  14 286  40 038 
               

  1. Other benefits include medical scheme contributions, longservice awards, vehicle benefits and UIF contributions.
  2. LTI figure includes SARs and CSPs awards that vest and become exercisable in the next 12 months

Prescribed officers

R’000  Salaries  Retirement 
fund 
Other 
benefits(1) 
Fixed 
 remuneration 
LTI(2)  Total 
30 June 2023              
P R Louw  3 220  639  456  4 315  4 634  8 949 
P J Uys  6 456  1 276  403  8 135  8 790  16 925 
Total  9 676  1 915  859  12 450  13 424  25 874 
30 June 2022              
P R Louw  3 037  598  432  4 067  1 886  5 953 
P J Uys  6 074  1 196  387  7 657  3 755  11 412 
Total  9 111  1 794  819  11 724  5 641  17 365 
             

  1. Other benefits include medical scheme contributions, longservice awards, vehicle benefits and UIF contributions.
  2. LTI figure includes SARs and CSPs awards that vest and become exercisable in the next 12 months.

Non-executive directors’ fees

The actual fees paid to non-executive directors are disclosed below (on an individual basis).

R’000 Fee for the 
year ended 
30 June 2023 
Fee for the 
year ended 
30 June 2022 
Non-executive (independent)     
S E N De Bruyn  1 094  972 
T Leoka(1)  103  – 
N P Mageza(2)  657  620 
P J Moleketi  657  620 
M Morobe(3)  678  580 
G G Nieuwoudt  477  480 
K S Rantloane  604  540 
F Robertson  721  680 
Subtotal  4 991  4 492 
      
Non-executive (non-independent)     
J Malherbe  477  480 
P J Neethling(4)  –  – 
A E Rupert(4)  –  – 
J P Rupert(4)  –  – 
Subtotal  477  480 
Total  5 468  4 972 
     

  1. Dr T Leoka was appointed as an independent non-executive director with effect from 22 March 2023.
  2. During the year under review Mr NP Mageza also received R812 000 (2022: R772 000) as director’s fees from RCL Foods Limited, a subsidiary of Remgro Limited.
  3. During the year under review Mr M Morobe also received R300 000 (2022: R150 000) as director’s fees from Wispeco Holdings Proprietary Limited, a subsidiary of Remgro Limited.
  4. Messrs A E Rupert, J P Rupert and P J Neethling receive no emoluments.Messrs A E Rupert, J P Rupert and P J Neethling receive no emoluments.

Johann Rupert
Chairman of the Remuneration and Nomination Committee

Stellenbosch
20 September 2023

2023 © Remgro Limited