Exxaro Resources limited
Environmental, social and governance report 2021

Remuneration committee report

Ras Myburgh: Remuneration committee chairperson

Ras Myburgh Remuneration committee chairperson


The committee employs a stakeholder-inclusive approach in the design of remuneration governance. This is demonstrated in the design of the revised remuneration policy and implementation plan. The extensive work undertaken by work streams in the design of the long-term, short-term and production incentive schemes demonstrate the committee's oversight of fair, transparent, stretched and yet rigorous target setting with strategic alignment. Implementation of the energy business strategy prompted the development of new group governance policies as well as remuneration governance principles, policy and practices for the short and long term as the business matures. This included a review of the expatriate policy and development of an international inbound recruitment and employment policy tailored to considerations of cost and affordability, fairness and attractiveness.

Overall, the year offered many opportunities to revisit our underpinning values and check our practices against the integrity built into the people processes. The coming year will see our continued commitment to performance-related pay principles towards a resilient and sustainable business.

Responsible remuneration

The committee approached responsible remuneration with clear and simple people-first objectives, supporting continuous operation as a matter of priority during the COVID-19 pandemic. Moreover, the committee continues the work of promoting employment equity principles by driving a programme of diversity and inclusion, and by addressing the wage gap and remuneration fairness during these times of acute economic pressure. The company approached employee integrated wellness, including financial health, as part of the support service offering in the period under review. The committee deemed it necessary to review and refresh the services of remuneration advisers with promising results.

As part of its remuneration governance objectives and commitment to fair and responsible remuneration, the committee oversaw the implementation of the revised remuneration philosophy and underpinning principles in 2021, particularly the performance-related incentive scheme. A malus and clawback policy and MSRs were implemented for executives.

Details can be found in the remuneration report.

The shape and form of diversity and continued inclusion is an ongoing body of work, which the committee does not lose sight of. Particularly, inclusion of disabled people, and training and development of black PWD in our organisation, with the objective of normalising enabling workplace environments, which embrace our workforce diversity. An inclusive opportunity presents itself, following the implementation of new work-from-home practices.

Overcoming challenges

Some of the internal and external factors that influenced remuneration during the period included high levels of unemployment, integration of the energy business and resilient human capital management.

A key value creation activity of the committee remains the group governance of human capital and our ethical culture, as demonstrated through employment equity. In a climate of growing unemployment and economic uncertainty, access to job opportunities and transparent, fair recruitment practices prompted revision and innovation in this regard. A sharp increase in job scams precipitated the committee's reputation risk management through a clear communication campaign of proper processes.

Linked to strategic change within the organisation, the continuing work of integration of the energy business and enabling the work of business growth by shaping the human capital governance, prompted the clear definition of governance and oversight practices. The challenge in finding the appropriate form of ethical and effective leadership, as part of a divergent kind of business model, prompted a multi-layered review.

Skilled and ethical leaders are in high demand. Retaining top talent and rewarding correct behaviours are at the core of protecting value and a lever of business resilience and sustainability. In the context of remote work, the impact of the pandemic on workplace practices and an integrated workforce underpinned management efforts to counter the perception of siloed business activity and employee isolation. Retaining and motivating our people is critical to delivering on our strategic outcomes. The work of performance-related incentives required considerable committee deliberation as a result.

Remuneration policy and implementation report

The King IV "say on pay" recommendations were made mandatory by incorporation in the JSE Listings Requirements. Companies listed on the JSE are required to table non-binding advisory shareholder votes on remuneration at AGMs. The JSE requires listed companies to engage with dissenting shareholders, and the manner and timing of such engagements must be disclosed. The efforts of such engagements have reaped rewards.

We are pleased to report that our shareholders, through a non-binding vote, approved the company's remuneration policy by 94.66% and its implementation by 93.15% in 2021. We continue to take our shareholders along with us in the work of responsible remuneration practices.

The committee obtained independent advice from PwC and Vasdex Proprietary Limited on a range of remuneration policy and implementation issues during 2020/2021 as well as independent remuneration benchmark analysis from a range of service providers.

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