Integrated Report 2021
Exxaro Resources limited
Environmental, social and governance report 2021
Ras Myburgh Remuneration committee chairperson
Dear shareholders,
After four years as chairperson of the remuneration committee, I am pleased to present my last remuneration policy and implementation report for Exxaro. As I hand the baton over to my successor, I am satisfied that the
committee fulfilled its oversight role and ensured that remuneration was
managed fairly and responsibly in support of our Sustainable Growth and
Impact strategy.
The challenges experienced in 2020 with the COVID-19 pandemic continued in 2021 and the Exxaro management team maintained good work in response to it. Employees at the conneXXion continued to work from home for most of the year while the operations ensured that production continued to deliver on our purpose to power better lives.
Other initiatives to improve productivity and safety, and to protect our workforce included:
The business remained resilient, producing sound financial results, which allowed us to pay tier 1 and tier 2 of the STI scheme. Our safety performance was pleasing in 2021 with no fatalities and an LTIFR of 0.08 enabling incentive awards, including the payment of R5 760 per employee as a LTIFR and fatality-free rewards.
Our CEO, Mxolisi Mgojo, is approaching retirement in July 2022 and this has resulted in the board appointing Nombasa Tsengwa as CEO designate. The shareholders approved her appointment as an executive director at the AGM on 27 May 2021. The remuneration committee approved an increase in remuneration for Nombasa over the transition period in her role as CEO designate. Market benchmarks informed the remuneration adjustment. Additional details on Nombasa's remuneration are provided in the implementation report.
Roland Tatnall was appointed on a three-year, fixed-term contract as the managing director for our energy business. Roland's package was informed through benchmarking undertaken by independent external remuneration specialists. His remuneration is made up of a guaranteed notional cost of employment (NCOE) and a guaranteed monthly allowance, which considers his market-sector experience, the exchange rate risk on a rand-denominated remuneration and the fixed-term nature of his contract. He will participate in an STI and long-term incentive (LTI) scheme specifically designed for this business. Additional details are provided in the implementation report.
At our AGM held on 27 May 2021, shareholders again gave us a strong approval on our remuneration policy, and how it was applied and implemented.
| Shareholder vote | 2020 | 2019 | 2018 | 2017 |
| Approval of the remuneration policy | 94.66% | 95.37% | 73.09% | 82.90% |
| Approval of the implementation of the remuneration policy | 93.15% | 95.53% | 76.38% | 83.30% |
Shareholders also approved the amendment of the deferred bonus plan (DBP) and long-term incentive plan (LTIP) rules to include malus provisions in line with local and global best practice.
The non-executive director remuneration increase of 5.3% was also approved from 1 June 2021.
The committee plans to continue engagement with shareholders in terms of a two-year cycle or as required if either the remuneration policy or implementation report is voted against by 25% or more of voting rights exercised.
The remuneration policy, implementation report, and non-executive director fees will be presented for separate annual non-binding votes at our AGM. Exxaro values and appreciates shareholder's constructive inputs as we continue to strive for excellence.
I am delighted that Exxaro was once again certified as a top employer from the Top Employers Institute, recognising Exxaro again as an employer of choice as we advance our people strategies.
Fair pay remains a commitment as one of the critical success factors aligned to our diversity and inclusion strategic intent. A deep dive into the extent of pay disparities was conducted and the remuneration committee approved an additional mandate to be made available for fair pay adjustments during the reward allocation process to specifically address the anomalies. These efforts resulted in successful outcomes with outliers reported in November 2020 halved by April 2021.
We began a job family review. This foundational work will ensure that remuneration is managed fairly and more accurately. It will also serve as a building block for other human resources areas such as learning and development and succession management.
Salary increases awarded to employees within the bargaining unit was again higher than executive and management and specialist category employees as we continued to seek justifiable measures to reduce the wage gap. Executive and management and specialist employees received a salary increase of 5.3% in 2021 while employees within the bargaining unit were awarded an increase of 7%. A four-year view is shown in the graph below.
Guaranteed remuneration increases (%)
The requisite organisational design work was undertaken to support a suitable start-up structure that will enable the attraction and retention of talent. Fit for purpose delegation of authority framework, the remuneration principles, remuneration policy and conditions of employment were formulated and approved. The salary matrix and the STI and LTI design and principles have also been finalised in order to drive the appropriate behaviours to achieve the business objectives.
We continue to seek independent and professional advice regarding remuneration matters from consultants regarded by the committee as fully independent. Exxaro received the following advice during the review period:
Performance achievement system, previously known as performance management system, was developed and implemented as part of our employee offering and the need to support the culture development of Exxaro. The focus shifted to improving the employee experience regarding performance management by enhancing the overall credibility and objectivity of the performance management process. The adjusted process was a co-created solution with the relevant stakeholders resulting in the performance achievement framework and its related principles being well received by all. Performance achievement remains an integral catalyst for supporting and enabling the implementation of our Sustainable Growth and Impact strategy. It also sets the tone for our reward and recognition philosophy in terms of the "pay-for-performance principle" and will be the foundation for achieving and aligning our individual, team and business performance.
The COVID-19 pandemic and lockdown restrictions continued to impact SLP commitments in 2021. The intake for learnerships, internships, and adult education and training was lower than planned. Union resistance against digital sourcing platforms also forced the business back to manual recruitment processes, which exacerbated the problem and negatively impacted recruitment measures. BUs have confirmed plans to mitigate the risks and close the SLP gaps in 2022. Exxaro's MyNexxt cloud-based learning management system and Microsoft Teams supported the business in the roll out of online learning interventions. Virtual platforms and classroom training (where possible) were used for training and development. Focus was also directed to building new competencies and capabilities aligned to Exxaro growth strategy. Capability development programmes like Strategic Foresight, market orientation and business acumen were developed for use on the MyNexxt platform and new programmes will be added to the learning catalogue as business capabilities are identified. The Powering Knowledge learning platform was also developed for the community members and access given to online programmes like entrepreneurship, managing meetings and project management. Open Source learning will be added to Exxaro's learning catalogue, giving employees unlimited access to local and global learning content through e-learning platforms like Open Sesame, LinkedIn Learning, Coursera, Udemy for business and OTT university. The Exxaro learning and development strategy aims to open the world of learning to every employee and community member, creating a culture of learning and growing and significantly enhancing each individual's learning experience.
In line with the delegation of authority, the following group-wide policies were approved by the board:
We embarked on the 2021 wage negotiations process with the COVID-19 pandemic restrictions and labour impact still challenging. In 2020, the uncertainty of the labour environment brought on by COVID-19, employers and employees agreed that the context was not conducive for long-term agreements. Consequently we concluded one-year wage agreements with all our trade unions.
We are pleased that in 2021 Exxaro secured long-term wage agreements (three-year duration) across all five employers within the Exxaro group. The benefit of these long-term agreements would be to secure labour and operational stability for Exxaro to enable broader operational and strategic delivery. Part of the settlement with Exxaro Coal was that medical aid became a compulsory benefit. Alexander Forbes conducted a thorough review and a new medical aid, ThebeMed, was introduced as part of the settlement.
Our negotiations plan focused on the following key areas:
Our remuneration policy will evolve as we embed new processes and schemes that were designed last year. These are aligned with best practice and we believe to be best-fit solutions.
In addition to the normal work plan, the committee will focus on the following areas in 2022:
We intend to have a new variable pay offering approved and implemented in 2022. The variable pay offering has been formulated with the following features in mind:
The design principles are aimed at incentivising participants using a scorecard comprising annual and milestone-based targets. The scheme also comprises of a once-off value appreciation rights plan (VARP), a leveraged reward linked to exponential growth in equity value over a specified period. Group alignment is also integral in the design with a matching incentive structured over Exxaro shares enabling alignment between the energy business and Exxaro's future performance.
The following group-wide policy areas will receive particular attention:
Repositioning of STI schemes was the outcome of a review process and inputs from shareholder engagements that started during 2019. The committee will monitor the effectiveness of the revisions to the STI schemes closely and in particular the effect of the main changes in the design relating to the following:
The past year has been challenging for all our stakeholders and our remuneration decisions have been mindful of this context. We have sought to ensure an appropriate balance of stakeholder interests while remaining a top employer that can attract and retain skilled and talented individuals who can drive long-term stakeholder value. In this context, we have applied considerable focus on ensuring that our remuneration philosophy and policy are fit-for-purpose and able to support our Sustainable Growth and Impact strategy.
As I leave my role as chairperson of the remuneration committee, I would like to thank the executive committee, my fellow committee members and the board for their insight, support and wisdom. I would also like to convey a heartfelt and special thank you to the executive head of human resources and her team for their hard work. It was a pleasure working with them. Lastly, I wish my successor all the best in the role.
Remuneration committee chairperson
In this section, we provide a broad overview of the remuneration philosophy, principles and policies applicable to the various remuneration elements in terms of the various employee categories, including executive directors, prescribed officers, senior management and on a high-level, other employees.
Our remuneration philosophy underpins our strategy and enables us to achieve our business objectives. Our commitment to pay for performance in alignment with shareholder value creation drives all our remuneration activities and continues to deliver a sound value proposition to employees.
We strive to attract, retain and empower the best talent to achieve our strategy and create sustainable shareholder value.
Our vision for rewards is to provide simple, integrated, holistic solutions, common messages and transparency, and a package differentiated from the market for us to attract, retain and energise talented, high-performing people as our employee offering.
We understand that remuneration is critical in attracting and retaining high-performing individuals. As such, the committee firmly supports the principle that pay must be aimed at reinforcing, encouraging and promoting superior performance. We believe in ethical, fair and responsible remuneration principles, and this belief continues to guide our policies directed at different remuneration elements in our remuneration framework.
The table below shows the remuneration offering used to reward employee categories in a fair and equitable manner. The policy provides for an annual assessment of the remuneration offering and consideration of any appropriate actions such as differentiating annual adjustments. In addition, the principles of internal parity, reward for performance and market competitiveness apply. These principles facilitate fair and responsible remuneration.
| Variable pay | |||||||
| Total guaranteed remuneration |
STI schemes | LTI schemes | |||||
| Employee category* | NCOE | Total guaranteed package (TGP) | STI | Special performance reward (SPR) |
LTIP | DBP** | ESOP |
| Executive management (F band) | x | x | x | x | x | ||
| Senior management (E band) | x | x | x | x | x | ||
| Middle management (D upper and D middle bands) | x | x | x | x | |||
| Junior management (D lower and C upper bands) | x | x | x | ||||
| Non-management and specialist employees at corporate office (C middle to A bands) | x | x | x | ||||
| Bargaining unit employees (C middle to A bands) | x | x | x |
* The Paterson job grades are indicated by applicable employee category.
** DBP excludes Paterson E lower grade.
The table below indicates the maximum percentage of total guaranteed remuneration (NCOE/TGP) applicable to the variable pay schemes by grade. The remuneration mix is benchmarked on an annual basis prior to granting annual LTI awards.
| Grade | Maximum STI (%) |
Maximum SPR (%) |
Maximum STI schemes (%) |
Maximum LTIP (%) |
Maximum DBP* (%) |
Maximum LTI schemes (%) |
Maximum total variable pay (%) |
| F upper* | 18.33 | 37.00 | 55.33 | 231.00 | 27.39 | 258.39 | 313.72 |
| F middle* | 18.33 | 32.00 | 50.33 | 223.00 | 24.91 | 247.91 | 298.24 |
| F lower* | 18.33 | 32.00 | 50.33 | 143.00 | 24.91 | 167.91 | 218.24 |
| E upper* | 18.33 | 25.00 | 43.33 | 101.00 | 21.45 | 122.45 | 165.78 |
| E middle | 18.33 | 20.00 | 38.33 | 76.00 | 10.54 | 86.54 | 124.87 |
| E lower and D upper | 18.33 | 15.00 | 33.33 | 50.00 | 0.00 | 50.00 | 83.33 |
| D middle | 18.33 | 10.00 | 28.33 | 38.00 | 0.00 | 38.00 | 66.33 |
| D lower and below | 18.33 | 0.00 | 18.33 | 0.00 | 0.00 | 0.00 | 18.33 |
* The maximum DBP matched portion is 90% of the total post-tax STI schemes for Paterson grades F band and E upper and 50% for E middle.
The table below provides an indication of the total variable pay due, by component, for achievement at target. The STI and SPR schemes explicitly state the target bonus quanta applicable at target. The LTIP performance vesting conditions are defined at threshold and maximum to provide an indication of targeted total variable pay, target is taken as halfway between threshold and maximum. In the case of the DBP, the midpoint of the voluntary deferral is applied, being 50% to the target STI schemes.
| Grade | Target STI (%) |
Target SPR (%) |
Target STI schemes (%) |
Target LTIP (%) |
Target DBP* (%) |
Target LTI schemes (%) |
Target total variable pay (%) |
| F upper* | 8.33 | 33.30 | 41.63 | 150.15 | 11.45 | 161.60 | 203.23 |
| F middle* | 8.33 | 28.80 | 37.13 | 144.95 | 10.21 | 155.16 | 192.29 |
| F lower* | 8.33 | 28.80 | 37.13 | 92.95 | 10.21 | 103.16 | 140.29 |
| E upper* | 8.33 | 22.50 | 30.83 | 65.65 | 8.48 | 74.13 | 104.96 |
| E middle | 8.33 | 18.00 | 26.33 | 49.40 | 7.24 | 56.64 | 82.97 |
| E lower and D upper | 8.33 | 13.50 | 21.83 | 32.50 | 0.00 | 32.50 | 54.33 |
| D middle | 8.33 | 9.00 | 17.33 | 24.70 | 0.00 | 24.70 | 42.03 |
| D lower and below | 8.33 | 0.00 | 8.33 | 0.00 | 0.00 | 0.00 | 8.33 |
* The target DBP matched portion is 50% of the total post-tax STI schemes for Paterson grades F upper to E middle.
CEO: Pay mix (%)
CEO designate: Pay mix (%)
FD: Pay mix (%)
Prescribed officers (on Paterson Band E – upper): Pay mix (%)
Our policy regarding the setting of fixed pay at Exxaro is to:
NCOE is the guaranteed remuneration portion of total pay and includes basic salary, benefits and retirement funding.
All bargaining unit employees receive a market-related basic salary, complemented by guaranteed allowances (housing and commuting), variable allowances (shift and standby) as well as benefits (see full list of benefits below).
All employees are entitled to the same range of benefits appropriate to their role level and specific circumstances. Management and specialist employees have flexibility in structuring their remuneration within certain company and legislative limitations. During the year, no changes were made to the policies for medical, health and other benefits, except for the medical aid scheme changes as described below.
| Retirement fund | Medical health schemes | Medical health schemes | EAP | ||||||
| All employees are members of one of Exxaro's accredited retirement funds. Retirement fund contributions are determined by specific conditions of employment and for the different levels and categories of employees. | Employees may annually elect to belong to any of the accredited medical schemes as they apply to the relevant employees. Contributions are made by employer and employee. Exxaro does not provide any post-retirement medical benefits. The post-retirement benefit obligation disclosed in the annual financial statements recognises past practice (by Eyesizwe) that was discontinued with the creation of Exxaro in November 2006. As part of the wage agreement with Exxaro Coal, medical aid membership became a condition of employment. ThebeMed was also introduced in addition to existing schemes offered. |
Employees are beneficiaries of a policy that provides additional cover for death, disability and dread disease through group personal cover taken out by Exxaro. |
As part of our wellness offering, the EAP offers support in multiple ways including, but not limited to legal, financial and dealing with substance abuse. |
The STI schemes focus on annually contributing to the strategic goals and delivering on Exxaro's operational and financial objectives in the shorter term.
Exxaro has two STI schemes (this will change for 2022):
The SPR scheme applies to all permanent employees (Paterson grade D middle and above) in Exxaro's management and specialist category.
Participants in the scheme are required to have an SPR contract with individual SPR objectives for the 12-month period. It is evaluated twice a year and the final rating forms the basis for payment of the SPR scheme.
The SPR is measured on an annual basis and paid out in March of the following year. Once the SPR target has been achieved a potential of 90% will be paid out. Above-target achievement will qualify for a maximum of 100% payout. If target was not achieved, there will be no payout made to the employee.
The STI scheme applies to the Exxaro group and is based on business performance with two components:
The STI is measured six-monthly for tier 1 (January to June and July to December). It is paid out in August and February. A BU will qualify for tier 1 on a sliding scale between a threshold of 90% and 100% performance against targets. If 90% of the target is achieved, no payout is applicable. If 95% of the target is achieved, 4.165% of the potential 8.33% payout will be applicable. If 100% of target is achieved, 8.33% (of annual guaranteed remuneration) will be payable. A modifier for production tonnages is then applied to the above percentages.
Tier 2 is measured on an annual basis from January to December and paid out in February. To qualify for tier 2, an improvement in group net operating profit between 101% and 127.1% above target is required for 2021 and a sliding scale is applied. If 127.1% improvement is achieved, a maximum of 10% of annual guaranteed remuneration will be payable.
If a BU, coal commodity business or corporate centre achieved between 91% and 100% of tier 1, they will only share in the same proportion in tier 2. For example, maximum of tier 2 is achieved, 10% of annual remuneration will be paid but a BU only achieved 95% of tier 1, then only 50% of tier 2 will be paid (5% of annual remuneration for tier 2) to that BU.
| STI component | Percentage of total guaranteed remuneration (%) | Description of measures | Threshold (0% of STI) | Maximum (100% of STI) | |
| 1 | 8.33 | BU BU net operating profit versus target Coal commodity business Average of BUs Corporate centre Consolidated group core net operating profit target |
90 | 100 | |
| 2 | 10.00 | Exxaro group Group net operating profit above target |
101 | 127.1 |
Tier 1 target for Ferroland is operating expenditure target. Tier 1 target for Coastal Coal (Durnacol/Hlobane and Tshikondeni) is based on objectives set out in a scorecard based on the mines in closure and rehabilitation plans.
Tier 2 target for these BUs is the improvement above target of 101% to 127.1% in group net operating profit. Should 100% of the tier 1 target be achieved, they share in the tier 2 incentive on the same percentage ratio achieved in tier 1.
Junior management and bargaining unit employees at commercial and tied operations, who are directly involved in production, qualify for line-of-sight STIs. The schemes are based on coal production with modifiers for safety and attendance per mining section. Both these schemes work on a sliding scale with threshold and full performance targets. Participants in these schemes do not qualify for the standard STI schemes.
Our LTIs consist of two schemes, which align remuneration with longer-term shareholder expectations and outcomes. Exxaro makes general share awards to participants (Paterson D middle and above) during the year in terms of the LTIP and the DBP schemes.
Greenshare, our new ESOP, was introduced in July 2020 and is applicable to employees not participating in the LTIP scheme.
The remuneration committee makes annual conditional performance awards, which are subject to the achievement of performance targets and employees remaining in employment for three years (full vesting period).
The face value of the allocations depends on the employee's NCOE and a grade-specific percentage. The remuneration committee evaluates the achievement of the performance conditions biannually. The awards will only vest after three years. The percentage of awards that ultimately vest ranges between a median threshold (50%) and a maximum (100%). A linear sliding scale is used to calculate a proportional vesting for an actual performance result between threshold and maximum. For any actual performance below threshold, no awards will vest and, for any performance at or exceeding the maximum, the awards that will vest are capped at 100%.
In the award, 33.33% will be based on ROCE.
The ROCE calculation will be based on net operating profit plus income from non-equity-accounted investments plus income from equity-accounted investments, as a percentage of average capital employed.
Therefore, a sliding scale based on a percentage ROCE achievement will apply as follows:
The ROCE will be calculated as the arithmetic average of the three years constituting the performance period.
Relative TSR has a weighting of 33.33% and will be compared to performance against the TSR peer group, namely the companies listed on the RESI 10 as at the preceding December of the offer.
The peer group listed companies included on RESI 10 as at December 2021 were:
Exxaro's TSR, for the purposes of this plan, is defined as the compound annual growth rate (CAGR) on a portfolio of Exxaro's ordinary shares purchased in December preceding the grant, holding the shares and reinvesting the dividends received from the portfolio in Exxaro shares until the end of the performance period, and then selling the portfolio on that day.
The monthly TSR calculation will be performed using the dividend payments and Reuters share price data on the nearest trading day to 31 December preceding the award and the nearest trading day to 31 December at the end of the performance period, and computing the compound annual growth rate between these values.
The TSR will be smoothed by computing the TSR in the same manner for the three-year period following each trading month for the six months preceding 31 December of the award, which means that the TSR is computed from:
The TSRs computed in this manner will then be arithmetically averaged to yield the final "smoothed TSR" for the TSR performance condition.
The smoothed TSR for each member of the peer group will be computed over the same period in the same manner. This period of smoothing is in line with the market.
If the TSR of Exxaro over the three-year period is equal to the minimum TSR target, the minimum LTIP award (50% of the TSR portion of the grant) vests.
If the Exxaro TSR is equal to or greater than the maximum TSR target, then 100% of the grant will vest.
The award vests linearly between 50% and 100% for performance between the minimum TSR target and the maximum TSR target.
The TSR targets for the LTIP grant are:
The remuneration committee has the discretion to make adjustments to the method of computation of the TSR for the peer group and for Exxaro. Under the rules of the plan, the remuneration committee may vary the TSR condition if events occur that would make such a variation necessary or desirable or would make the amended performance condition a fairer measure of performance.
ESG targets have a weighting of 33.34%. The targets will be measured in terms of the approved strategic dashboard used to monitor achievement of the business strategy:
The table below summarises the performance vesting conditions applicable to the 2021 awards.
| Performance vesting condition | Weight (%) | Vesting of awards (after year three) | ||||
| ROCE | 33.33 | 17% ROCE achievement will result in 50% vesting (threshold) | ||||
| 19% ROCE achievement will result in 90% vesting (target) | ||||||
| 22% ROCE achievement will result in 100% vesting (stretched) | ||||||
| TSR | 33.33 | Median TSR peer group position will result in 50% vesting | ||||
| Top three TSR peer group position will result in 100% vesting | ||||||
| ESG as per FTSE Russell index | 33.34 | Median ranking will result in 50% vesting | ||||
| Upper quartile ranking will result in 100% vesting |
Where the actual performance falls between the stated ranges, linear interpolation will be applied between the stated vesting points.
The rules and calculating principles will follow the same approach as set out in detail above for future awards.
The remuneration committee selects participants, based on employee grouping and performance, from executive management and senior management to participate in the DBP. The scheme encourages share ownership while reinforcing retention.
Participants from F upper to E upper Paterson grades can elect to voluntarily use a portion (50% or 90%) and E middle (50%) of their post-tax STI/SPR payments to acquire Exxaro shares at the prevailing market price.
Participants are entitled to all rights in respect of the shares (pledged) purchased with their post-tax STI/SPR portion, including dividends. If the pledged shares are held for the three-year pledged period, and participants remain in service for this period, Exxaro will provide a matching award on a one-for-one basis.
No performance vesting conditions are applicable to the matching award.
Our new ESOP scheme, Greenshare, was implemented in 2020.
It is broadly based on the principles of Mining Charter III:
When dividends are declared, employees in service will receive a cash payment equal in value to 560 Exxaro shares minus dividend withholding tax. Employees will remain in the scheme for the duration of employment. Employees will not have capital appreciation rights.
Normal termination benefits (leave payout, etc) are payable whenever employment is terminated before the normal retirement date by Exxaro or when the employees accept voluntary redundancy.
As part of our targeted voluntary severance packages Wim Diedericks left in December 2021. There were no other special agreements in place regarding severance packages for executive employees.
Executive employment contracts are generally valid until the normal retirement age of 63 with a notice period of three to six months or payment in lieu thereof. The current executive employment contracts do not have a restraint-of-trade clause but include confidentiality undertakings.
Any shares due in terms of participating in the LTIP and DBP are made in line with the rules of the schemes.
Good leaver provisions triggered in the event of terminations due to:
Recognition continues to be an important aspect of our total rewards offering with informal and formal recognition encouraged. Exxaro has an online platform, which is widely used. Due to the uncertainty around the pandemic, the decision was made to hold the formal recognition function, "Evergreen", virtually. The CEO hosted the 2019 and 2020 awards, and all employees were invited to attend, not just the winners. The Exxaro culture themes and strategy were embedded in the format of the day. Positive feedback has been received and the human resources team will continue to look at how the programme can be enhanced in future.
A new approach in the setting of remuneration for external directors was approved in March last year. The methodology ensured better alignment of roles and responsibilities between the main board and sub-boards. The expected annual hours required, and the relevant skills required for the different sub-committees were also considered and it was decided that there would be no differentiation in remuneration between the sub-committees unless significant workload differences are anticipated.
This was subsequently approved at the AGM.
This section highlights the forward-looking change in the remuneration policy.
The current approach of the tier 1, tier 2 and SPR STI schemes is replaced with two new STI scheme structures, which came into effect from 1 January 2022:
Participants to the GIS include all executive to middle management level employees (FU to DM Paterson) in the group functions and coal business as well as employees in group functions (DL Paterson and below).
The scheme rewards the achievement of annual goals, which in turn are aligned to the medium and longer-term business strategy. All participants will receive payments that reflect annual achievements. In the case of Paterson D band and below participants, an interim payment reflective of the business performance portion only, may be made at the half-year mark. This will be offset against the resultant annual payment due.
Following the benchmarking of the targeted STI percentages (as a percentage of NCOE) for participant roles and grades, relative to the market, the following STI percentages have been adopted. These new STI percentages consolidate the previous fragmented allocation to tier 1, tier 2 and SPR into a single applicable STI percentage for the scheme. The targeted STI quantum (by grade) is apportioned in the ratio 80% to business performance, and 20% to individual performance. The performance range for either element varies from 0% to 150% of the targeted STI quantum.
Table 1: STI quantum at target (STI percentage of NCOE)
| Paterson grade | New STI (Target) |
New STI (Maximum) |
Business performance (Target) |
Individual performance (Target) | Business performance (Maximum) |
Individual performance (Maximum) |
||
| F upper | 100.0% | 150.0% | 80.0% | 20.0% | 120.0% | 30.0% | ||
|---|---|---|---|---|---|---|---|---|
| F middle | 75.0% | 112.5% | 60.0% | 15.0% | 90.0% | 22.5% | ||
| F lower | 75.0% | 112.5% | 60.0% | 15.0% | 90.0% | 22.5% | ||
| E upper | 60.0% | 90.0% | 48.0% | 12.0% | 72.0% | 18.0% | ||
| E middle | 50.0% | 75.0% | 40.0% | 10.0% | 60.0% | 15.0% | ||
| E lower | 35.0% | 52.5% | 28.0% | 7.0% | 42.0% | 10.5% | ||
| D upper | 35.0% | 52.5% | 28.0% | 7.0% | 42.0% | 10.5% | ||
| D middle | 25.0% | 37.5% | 20.0% | 5.0% | 30.0% | 7.5% | ||
| D lower | 15.0% | 22.5% | 12.0% | 3.0% | 18.0% | 4.5% | ||
| A-C band | 12.5% | 18.8% | 10.0% | 2.5% | 15.0% | 3.8% |
* At threshold and below threshold, the percentage will be 0.
While the newly adopted STI percentages (at target) represent an increase in applicable percentage by grade and cost (at target) relative to the aggregated STI percentages applicable for tier 1, tier 2 and SPR (at target), it requires increased performance outcomes to realise the revised STI percentages at target. Alternatively stated, the achievement of targeted performance against the tier 1, tier 2 and SPR schemes will result in similar STI quantum outcomes (on average) on the GIS.
The further apportionment of the 80% business performance for the executive directors and prescribed officers' roles is disclosed in table 2:
Table 2: Apportionment of STI quantum at target
| Business performance | |||||||||
| Grouping | Grade | Role | Exxaro group |
Group function | Division | Individual | |||
| F upper | CEO | 80% | 20% | ||||||
|---|---|---|---|---|---|---|---|---|---|
| F middle | CEO designate | 50% | 30% | 20% | |||||
| F lower | FD | 30% | 50% | 20% | |||||
| CEO and direct reports | F lower | Managing director: minerals | 30% | 50% | 20% | ||||
| E upper | Executive head/general manager: group function/chief risk officer | 50% | 30% | 20% | |||||
| E middle | Company secretary | 50% | 30% | 20% | |||||
The business scorecards embed the business priorities appropriately at Exxaro group, group functional and operational levels. Table 3 below provides an overview of the goals and relative impact it has in the potential outcome of each business scorecard. The resultant outcome is re-weighted to 80%.
Table 3: Business scorecard goals and weight
| Overall structure | Weight | Generic drivers | Exxaro group |
Group function |
Operation | ||
| Financial, operational 75% and strategic | EBITDA | 50.0% | 50.0% | 0 – 50% | |||
|---|---|---|---|---|---|---|---|
| 75% | Other financial | 15.0% | 10.0% | 15% – 45% | |||
| Operational and strategic | 10.0% | 15.0% | 10% – 30% | ||||
| Safety and climate 25% change | Safety | 10.0% | 10.0% | 10.0% | |||
| 25% | Water intensity | 7.5% | 7.5% | 7.5% | |||
| Energy efficiency | 7.5% | 7.5% | 7.5% | ||||
| Overall scorecard total | 100.0% | 100.0% | 100.0% | ||||
The revised individual performance contract is assessed on a standardised one to five rating scale. The year-to-date rating will translate to a portion allocated to individual performance.
The individual performance contracts for 2022 for executive directors follows further in this policy section.
LOS schemes are applicable to the production operations only. The participants in these schemes include permanent employees, in roles graded at and below DL Paterson, based at the operations.
The measurement and payment cycles align with monthly and quarterly reporting periods.
Participants are incentivised to deliver consistent safe, quality production volumes.
The TSR measurement component was revised in 2021, to align with the current business and future strategic objectives (to diversify into other minerals and renewable energy generation). The FTSE/JSE Africa Index Series Resource 10 index (RESI 10) has consistently been dominated by gold and platinum mining companies over the past measurement periods. It therefore lacks a comparison for Exxaro. Energy currently comprises nearly 10% of Exxaro's earnings before interest, taxes, depreciation and amortisation (EBITDA) through Cennergi with the intention to further grow the energy business in the future. Therefore, energy representation within the peer group was required for LTIP awards made going forward.
The TSR peer group was revised in 2021 to diversify into other minerals and renewable energy generation. The RESI 10 over the past measurement periods was consistently dominated by gold and platinum mining companies, and therefore lacking as sole comparison to Exxaro.
The peer group components and weighting of each will be as follows:
| Peer group entities | Weighting |
| RESI 101 | 70% |
| Energy peer group2 | 15% |
| Thungela3 | 15% |
| 100% |
| Notes: | |
| 1 | The 10 largest resource companies listed on the JSE, ranked by investable market capitalisation |
| 2 | Energy peer group:
|
| 3 | Thungela Resources as a pure coal mining proxy |
The outcome of the review of the job families and the impact on pay discrepancies will be conducted to assess the extent to which remuneration is managed fairly.
In addition, a vertical wage gap calculation will be done and benchmarked to measure the distribution of remuneration within the company. The smaller increases awarded to executives in previous years should help narrow the gap.
Other fair pay interventions will be undertaken in line with the chosen journey.
The remuneration committee and the SERC continue to have a keen interest in the extent to which progress is made as part of the diversity and inclusion strategy.
A revised non-executive director remuneration approach, which looked at the equalisation of committee fees, was approved in 2020. For the sub-committees, there is no differentiation in remuneration between the sub-committees, the only differentiation is based on workload. The current fees payable to non-executive directors is made up of an annual retainer fee and a per-meeting fee for ad hoc or extraordinary meetings for both board and sub-committee meetings. This retainer fee is based on an assessment of normal annual board and committee workload and is paid in 12 equal monthly payments. Benchmarking is done using the Willis Towers Watson's JSE listed companies' survey.
The design principles of the Cennergi STI and LTI schemes are aimed at incentivising participants using a scorecard comprising annual and milestone based targets. The scheme also comprises a once-off VARP, which takes the form of a leveraged reward, linked to exponential growth in equity value over a specified period. Group alignment is also integral in the design with a matching incentive structured over Exxaro shares enabling alignment between the energy business and Exxaro's future performance. Both STI and LTI schemes are subject to malus and clawback, in line with the Exxaro group policy.
Ethical and responsible leadership and effective governance practices require that all employees act in the best interests of their employer. The recommended practice 30(e) of King IV requires that the remuneration policy includes malus and clawback provisions. The malus and clawback policy allows the board, in fulfilling its fiduciary duty to shareholders, to apply malus when a trigger event happens prior to the vesting of long-term incentive schemes and/or payment of STI schemes by invoking its discretion to reduce, cancel and/or recoup the incentive. Similarly, the board may invoke clawback where incentive remuneration has already vested, been exercised, been settled, paid or otherwise made available and a trigger event is discovered up to a period of 36 months. LTIP and DBP scheme rules have been updated to incorporate malus, clawback and MSR. The policies and rules ensure compliance with applicable legislation, King IV requirements, market practices, and stakeholders' interest.
Since being approved, the provisions of malus and clawback have been included in the rules of the STI and LTIP schemes. They have also been incorporated in new LTIP offer letters. Employees will be reminded of these provisions while communicating the new incentive schemes.
At the AGM that took place in May 2021, the following MSR targets were approved:
The following methods can be used to achieve the MSR:
The implementation of MSR began with affected members of the executive committee. A tool has been developed to help each executive build their MSR over the required period of five years, using the methods available.
The forward-looking performance contract for the CEO, CEO designate and FD are shown in the tables below. The performance contracts will, in due course, be adjusted with this in mind.
| Individual key objectives | KPIs | Weight | ||||
| Strategic growth and financial performance |
|
100% | ||||
CEO will retire end July 2022.
| Individual key objectives | KPIs | Weight | |||||
| Strategic growth and financial performance | Drive the implementation of the energy strategy | 35% | |||||
| Drive the implementation of the minerals strategy (including early value coal strategy) | |||||||
| Achieve ROCE target of 20% in terms of LTIP sliding scale | |||||||
| Finalisation of the divestment of Leeuwpan | |||||||
| Business transformation and operational excellence | Demonstrable actions to maximise early value such as Grootegeluk, Mafube and Belfast mine plans all updated and used for the 2021 and beyond business plans and budget, all work done including exit and terminal values at exit of assets | 25% | |||||
| Ensure the organisation enables us to achieve the Exxaro vision and strategy through leadership, empowered accountability and decision-making capabilities and management innovation | |||||||
| Leading people change and social impact | Embed connect2NEXT and Exxaro culture by effectively communicating the approved strategy and plans ensuring execution and alignment across the group | 20% | |||||
| Review and finalisation of diversity and inclusion framework | |||||||
| Achieve 90% of total score (13.5 out of 15 points) and one bonus point on B-BBEE rating | |||||||
| Achieve Mining Charter III, dtic and DEL employment equity targets aligned to the approved employment equity and SLP mechanisms | |||||||
| Achieve gender representation targets for the group in core and in management levels aligned to the approved employment equity plan and mechanisms | |||||||
| Safety and business sustainability | Implement actions at group level to reduce environmental impact (including decarbonisation strategy). Sustain Exxaro’s ESG rating | 10% | |||||
| Cost management and prudence | Demonstrable actions to strategically manage costs and strategic business risks to ensure alignment to the risk appetite framework and mindful of the trade-offs in respect of the Sustainable Growth and Impact strategy
Identify areas of cost reduction and savings across the Exxaro group | 10% |
| Individual key objectives | KPIs | Weight | |||||
| Strategic growth and financial performance | Divestment from Leeuwpan operations as approved by board (as per project plan, due diligences complete, successful negotiations of final agreements) | 35% | |||||
| Deliver supply chain procurement savings of R500 million through operational expenditure, capital and strategic sourcing | |||||||
| Achieve ROCE target of 20% in terms of LTIP sliding scale | |||||||
| Ensure sufficient funding is available to grow new energy and minerals business(es) aligned to the Exxaro capital allocation framework | |||||||
| Capital allocation – revise and embed methodology on capital allocation between minerals and energy | |||||||
| Develop plan to build sustainable core businesses minerals and energy (inclusive of funding model(s), structures, planned investments). Market studies completed and identification of possible opportunities. Financial model updated to taking into account value accretion versus affordability in context of risk exposure | |||||||
| Business transformation and operational excellence | Appoint diesel service provider and associated diesel rebate claim system | 25% | |||||
| Facilitate integration of financial reporting of new minerals and energy business (aligned to progress of the investment strategy) | |||||||
| Accurate, timely and relevant financial reporting within seven days of month-end closing | |||||||
| Leading people change and social impact | Embed connect2NEXT and Exxaro culture by effectively communicating the approved strategy and plans ensuring execution and alignment across the group | 20% | |||||
| Review and finalisation of diversity and inclusion framework | |||||||
| Achieve Mining Charter III procurement targets for 2022 (37% out of 40%) | |||||||
| Achieve preferential procurement target according to amended dtic codes (27 of 29 points) | |||||||
| Achieve Mining Charter III, dtic and DEL employment equity targets aligned to the approved employment equity and SLPs and mechanisms | |||||||
| Achieve gender representation targets for the group in core and in management levels aligned to the approved employment equity plan and mechanisms | |||||||
| Safety and business sustainability | Positive impact as spokesperson for strategy and finance-related matters. Sustain current stakeholder perception rating benchmarked by FTI Consulting and set baseline for 2022 | 10% | |||||
| Cost management and prudence | No overdue and or repeat level 1 and 2 audit findings in area of responsibility Identify areas of cost reduction and savings across the Exxaro group | 10% |
Our implementation report discloses remuneration outcomes for non-executive directors, executive directors and prescribed officers. It includes total remuneration received as well as a single, total figure of remuneration receivable (as per King IV) for the review period and all constituent remuneration elements.
In addition, details of all awards made under the Exxaro variable incentive schemes are disclosed under sections for STIs and LTIs, including reference to awards in current and prior years that have not yet vested, vesting and expiry dates where applicable, the fair value at the end of the review year, as well as the cash value of awards settled. The performance measures used and their weightings are disclosed.
In the review period, implementation complied fully with the remuneration policy.
The image below provides details on the standard performance rating scale.
| Individual key objectives | KPIs | Weight | Rating | ||||||
| Strategic growth and financial performance | Drive implementation growth and transformation strategy | 35% | 3 | ||||||
| Drive implementation of the energy strategy | 3 | ||||||||
| Oversight: implementation of the minerals strategy by CEO designate (including early value coal strategy) | 4 | ||||||||
| Achievement of TSR top 3 performer versus Res 10 peer group companies and ROCE target of 20% for capital projects in terms of LTIP sliding scale | 3 | ||||||||
| Business transformation and operational excellence | Tonnages delivered from coal operations (50.484Mt) at EBITDA of R8 341 million as per board-approved budget | 25% | 3 | ||||||
| Oversight: Demonstrable actions to maximise early value such as Grootegeluk, Mafube and Belfast mine plans all updated and used for the 2021 and beyond business plans and budget, and all work done including exit and terminal values at exit of assets | 4 | ||||||||
| Transform the organisation to enable us to achieve the Exxaro vision and strategy through leadership, empowered accountability and decision-making capabilities and management innovation | 3 | ||||||||
| Clear evidence of the approval and implementation of an operating model that empowers people |
|||||||||
| Leading people change and social impact | Embed connect2NEXT and Exxaro culture by effectively communicating the approved strategy and plans ensuring execution and alignment across the group | 15% | 3 | ||||||
| Drive implementation of Sustainable Growth and Impact strategy | 2 | ||||||||
| Oversight: Implementation of diversity and inclusion strategy by CEO designate | 2 | ||||||||
| Achieve 90% of total score (13.5 out of 15 points) and one bonus point on B-BBEE rating | 3 | ||||||||
| Achieve Mining Charter III and DEL employment equity targets aligned to the approved employment equity and SLP mechanisms | 3 | ||||||||
| Achieve gender representation targets for the group in core and management levels aligned to the approved employment equity plan and mechanisms | 3 | ||||||||
| Oversight: Implement actions at group level to reduce environmental impact (including decarbonisation strategy) by CEO designate | 15% | 4 | |||||||
| Safety and business sustainability |
| 3 | |||||||
| Cost management and prudence | Oversight: Demonstrable actions by CEO designate to strategically manage costs to ensure alignment to the risk appetite framework and mindful of the trade-offs in respect of the Sustainable Growth and Impact strategy | 10% | 3 | ||||||
| Performance rating | 3.2 |
| Individual key objectives | KPIs | Weight | Rating | ||||||
| Strategic growth and financial performance | Drive the implementation of the minerals strategy (including early value coal strategy) | 30% | 3 | ||||||
| Deliver optimal exit strategy and valuation for each asset in the coal portfolio | 4 | ||||||||
| Optimise domestic and seaborne (including diversification) market (COVID-19 dependent) | 4 | ||||||||
| Achieve ROCE target of 20% for capital projects in terms of LTIP sliding scale | 3 | ||||||||
| Business transformation and operational excellence | Tonnages delivered from coal operations (50.484Mt) at EBITDA of R8 341 million as per board-approved budget | 30% | 4 | ||||||
| Integrate, report on and manage commodity-related risks in risk management framework, including COVID-19-related as part of OPCO review process | 4 | ||||||||
| Finalisation and execution of the span of control strategy for Matla and Grootegeluk | 3 | ||||||||
| Implement optimisation, monitoring and reporting to improve operations/ productivity through operational excellence and digitalisation | 3 | ||||||||
| Leading people change and social impact | Drive people and capability development at operations through mentorship programmes and talent development to facilitate retention and high performance | 20% | 3 | ||||||
| Support group to achieve 90% of total score (13.5 out of 15 points) and one bonus point on B-BBEE rating | 4 | ||||||||
| Execute and achieve employment equity targets as per approved employment equity and SLP and mechanisms for the minerals business | 3 | ||||||||
| Drive the implementation and embedment of the diversity and inclusion strategy at group level, as approved by the board, by demonstrable actions to question practices and break down any form of unintentional exclusions/ differentiation related to race, gender, sexual orientation, religion, etc | 2 | ||||||||
| Support and cultivate sound and healthy union, community and labour relationships | 4 | ||||||||
| Drive transformation through improved workplace and employment experiences and living conditions | 4 | ||||||||
| Safety and business sustainability | Drive the implementation of demonstrable actions at group level to reduce environmental impact (including decarbonisation strategy) | 10% | 4 | ||||||
| Demonstrable actions to reduce environmental impact and build a cleaner world, by reducing water buffer gap, carbon emissions, energy intensity, specific interventions at mine closures, rehabilitations and disturbed versus rehabilitated land | 3 | ||||||||
| Drive the strategy to sustain current ratings on carbon disclosure for water and energy | 3 | ||||||||
|
3 | ||||||||
| Cost management and prudence | Influence analyst and market expectations with stakeholder affairs to sustain current stakeholder perception rating benchmarked by Singular (including management of key stakeholders such as Eskom, ArcelorMittal South Africa, Transnet Freight Rail, RBCT and Minerals Council) | 10% | 4 | ||||||
| Drive actions to strategically manage head office costs aligned to the risk appetite framework and mindful of the trade-offs in respect of the growth strategy | 5 | ||||||||
| Demonstrable actions to strategically manage mine costs (excluding head office costs) with 2% year-on-year saving aligned to the risk appetite framework and mindful of the trade-offs in respect of the growth strategy | 4 | ||||||||
| No overdue level 1 and 2 audit findings in area of responsibility | 2 | ||||||||
| Performance rating | 3.5 |
| Individual key objectives | KPIs | Weight | Rating | ||||||
| Strategic growth and financial performance | Refinancing Exxaro's existing term facility in 2021 through a combination of bank and bond funding (ensure forecast net debt covered 120% by term facility and interest rate comparable with existing facilities) | 35% | 4 | ||||||
| Divestment from Business of Tomorrow investments as well as ECC*/Leeuwpan operations as approved by investment panel (as per project plan, due diligences complete and successful negotiations of final agreements) | 3 | ||||||||
| Monetise remaining 10% shareholding in Tronox as well as flip up shares (dependent on market conditions) | 4 | ||||||||
| Deliver supply chain procurement savings of R273 million through operating expenditure, capital and strategic sourcing | 3 | ||||||||
| Achieve ROCE target of 20% in terms of LTIP sliding scale | 4 | ||||||||
| Business transformation and operational excellence | Satisfactory outcome in respect of diesel rebate dispute with SARS | 25% | 3 | ||||||
| Facilitate integration of financial reporting of new minerals and energy businesses (aligned to progress of the investment strategy) | 3 | ||||||||
| Accurate, timely and relevant financial reporting within seven days of monthend closing | 3 | ||||||||
| Leading people change and social impact | Achievement of the culture plan as presented at half-year | 15% | 3 | ||||||
| Embed diversity and inclusion by demonstrable actions to question practices and break down any form of unintentional exclusions/differentiation that can be related to race, gender, sexual orientation, religion, etc | 3 | ||||||||
| Achieve 90% of total score (24 out of 27 points) and one bonus point on B-BBEE rating | 4 | ||||||||
| Achieve 34% out of 40% for Mining Charter III + 24 points out of 29 for dtic preferential procurement targets | 4 | ||||||||
| Achieve group employment equity plans and targets | 3 | ||||||||
| Achieve gender representation in management levels as per approved employment equity plan and mechanisms | 3 | ||||||||
| Safety and business sustainability |
| 15% | 3 | ||||||
| 3 | ||||||||
| Cost management and prudence | Demonstrable actions to strategically manage costs to ensure a roll-over from 2020 to 2021 (inflation saving) aligned to the risk appetite framework and mindful of the trade-offs in respect of the Sustainable Growth and Impact strategy | 10% | 3 | ||||||
| No overdue and/or repeat level 1 and 2 audit findings in area of responsibility | 2 | ||||||||
| Performance rating | 3.3 |
* Divestment concluded in September 2021.
In the table below, we disclose the performance outcomes for each executive director and prescribed officer supporting the SPR as well as the two components of the STI scheme. All payments are due as per policy and there were no deviations.
| SPR | STI | ||||||||||
| NCOE (R) |
Rating (number) |
Total factor (%) |
Actual (R) |
Tier 1 factor (%) |
Tier 2 factor (%) |
Total factor (%) |
Actual (R) |
Total STI awards (R) |
STI awards as % of NCOE (%) |
||
| MDM Mgojo | 7 901 087 | 3.00 | 37.00 | 2 631 064 | 8.33 | 10.00 | 18.33 | 1 448 272 | 4 079 336 | 51.63 | |
| N Tsengwa1 | 6 027 849 | 3.00 | 32.00 | 1 736 022 | 8.33 | 10.00 | 18.33 | 1 104 906 | 2 840 928 | 47.13 | |
| PA Koppeschaar | 5 997 927 | 4.00 | 32.00 | 1 919 338 | 8.33 | 10.00 | 18.33 | 1 099 422 | 3 018 760 | 50.33 | |
| V Balgobind | 3 509 586 | 4.00 | 25.00 | 877 398 | 8.33 | 10.00 | 18.33 | 643 310 | 1 520 708 | 43.33 | |
| AS de Angelis | 3 263 475 | 4.00 | 25.00 | 815 870 | 8.33 | 10.00 | 18.33 | 598 196 | 1 414 066 | 43.33 | |
| JG Meyer | 4 315 962 | 4.00 | 25.00 | 1 078 992 | 8.33 | 10.00 | 18.33 | 791 118 | 1 870 110 | 43.33 | |
| MI Mthenjane | 4 068 234 | 4.00 | 25.00 | 1 017 060 | 8.33 | 10.00 | 18.33 | 745 708 | 1 762 768 | 43.33 | |
| AT Ndoni2 | 445 858 | – | 20.00 | – | 8.33 | 10.00 | 18.33 | 81 726 | 81 726 | 18.33 | |
| SE van Loggerenberg3 | 322 975 | – | 20.00 | – | 8.33 | 10.00 | 18.33 | – | – | – | |
| M Veti | 4 012 608 | 4.00 | 25.00 | 1 003 152 | 8.33 | 10.00 | 18.33 | 735 514 | 1 738 666 | 43.33 | |
| Total STI awards | 11 078 896 | 7 248 172 | 18 327 068 |
| 1 | Appointed to the board on 16 March 2021. |
| 2 | Appointed on 1 November 2021. |
| 3 | Resigned on 18 February 2021. |
The SPR actual includes the individuals' voluntary deferral into the DBP.
The evaluated SPR contracts for 2021 of the CEO, MD Minerals/CEO designate and the FD are stated below.
| KPI | KPI | |
| Deliver signed SPA for the sale of ECC* by the first half of 2021 and Leeuwpan by the end of 2021 | Identify areas of cost reduction and savings across the Exxaro group | |
| Weight 50% | Weight 50% | |
| Rating 3 | Rating 3 |
* Divestment concluded in September 2021.
| KPI | KPI | |
| Manage robustness of Exxaro portfolio by concluding Moranbah South joint venture agreement to reach "decision to mine over the next 18 months" (COVID-19 dependent) | Identify areas of cost reduction and savings across the Exxaro group | |
| Weight 50% | Weight 50% | |
| Rating 3 | Rating 3 |
| KPI | KPI | KPI | ||
|
Ensure sufficient funding is available to grow new minerals and energy businesses aligned to the Exxaro capital allocation framework. To the extent that not compatible, revise capital allocation framework. Communication of revised capital allocation framework to market. |
Identify areas of cost reduction and savings across the Exxaro group | ||
| Weight 25% | Weight 25% | Weight 50% | ||
| Rating 4 | Rating 4 | Rating 3 |
Summary graphs are provided to highlight the impact of performance-based pay on total remuneration due between 2021 and 2020.
The notes below explain the calculations supporting the graphs.
| 1 | Minimum 2021 reflects the NCOE for the period (includes recognition and other payments) | ||
| 2 | On-target 2021 reflects the sum of the following:
|
||
| 3 | Maximum 2021 reflects the sum of the following:
|
||
| 4 | Actuals for 2021 and 2020:
|
The summary provides insight to the SPR contract outcomes, which resulted in the SPR incentives accrued for 2021. Saret van Loggerenberg and Andiswa Ndoni did not have SPR contracts for 2021.
CEO
Objective: Deliver signed SPA for the sale of ECC* by the first half of 2021 and Leeuwpan by the end of 2021
Outcomes: The divestment of ECC* was completed and closed out on 3 September 2021 with ownership transferred to Overlooked Colliery Proprietary Limited.
The disposal of Leeuwpan is progressing well following the divestment having to be restarted in the first quarter of 2021 after the preferred bidder failed to raise the required funding. The signed Leeuwpan sale of business agreement and applications for Competition Commission approval and section 11 mineral rights transfer from the DMRE are anticipated to be completed in the first quarter of 2022 with the project closing in the second half of 2022.
The new timelines are supported by the executive committee and the board.
Objective: Identify areas of cost reduction and savings across the Exxaro group
Outcomes: To ensure competitiveness, Exxaro continuously focuses on its cost base. During the year, the CEO was tasked to look at non-labour-related cost savings at corporate office. Cost and capital savings of 14.7% of the addressable base were identified and will be implemented.
MD Minerals/CEO Designate
Objective: Manage robustness of Exxaro portfolio by concluding Moranbah South joint venture agreement to reach "decision to mine over the next 18 months" (COVID-19 dependent)
Outcomes: An independent study manager was appointed in the fourth quarter of 2021, as agreed between the joint venture partners, and supported by the respective CEOs. Due to COVID-19 regulations in Australia, there were delays in the appointment of the study manager.
The study manager progressed the agreed scope, cost and schedule for the period during 2021.
Objective: Identify areas of cost reduction and savings across the Exxaro group
Outcomes: To ensure competitiveness, Exxaro continuously focuses on its cost base. During the year, the managing director: minerals/CEO designate was tasked to look at non-labour-related cost saving at corporate office. Cost and capital savings of 14.7% of the addressable base were identified and will be implemented.
FD
Objectives:
Outcomes: In September 2021, Exxaro announced its strategy to diversify into future facing minerals (copper, bauxite and manganese) and to grow its energy business in utility generation, distributed generation and services. Market studies were completed, affordability modelled and screening work commenced on possible opportunities. The group also continues to ensure the robustness of its coal portfolio and a decision was taken to divest from ECC* and Leeuwpan.
ECC's* divestment was completed in 2021 and Leeuwpan is well on its way.
* Divestment concluded in September 2021.
Objectives:
Outcomes: A revised capital allocation framework was communicated to the market at the Capital Markets Day in September 2021.
Dividend payouts will now receive priority over growth opportunities, and Exxaro indicated its targeted capital allocation ranges for the minerals and energy businesses.
It is envisaged that a large portion of the energy portfolio will be financed through limited recourse project finance.
During the year, the R8 billion loan facility was also successfully refinanced at favourable terms despite resistance to thermal coal.
Objective: Identify areas of cost reduction and savings across the Exxaro group compared to the 2021 budget
Outcomes: To ensure competitiveness, Exxaro continuously focuses on its cost base. During the year, the FD was tasked to look at non-labour-related cost savings at corporate office. Cost and capital savings of 14.7% of the addressable base were identified and will be implemented.
Executive head: human resources
Objective: Deliver suitable variable workforce and employment models for differing requirements of the energy and minerals businesses to enable transitioning at speed and scale
Outcomes: Our organisational design principles and practices were revised in line with the new businesses.
A focused employment model was designed for the energy business in terms of organisational design and differentiated remuneration offering.
Objective: Identify areas of cost reduction and savings across the Exxaro group
Outcomes: To ensure competitiveness, Exxaro continuously focuses on its cost base. During the year, the executive head: human resources was tasked to look at non-labour-related cost savings at corporate office. Cost and capital savings of 14.7% of the addressable base were identified and will be implemented.
Objective: Delivered the revised STI for implementation to the organisation
Outcomes: Both schemes have been delivered in line with the remuneration committee and shareholder directive received in 2019.
The schemes are aligned to organisation and business objectives.
The design principles have been approved and implementation is in progress across the business.
Both schemes are aligned to the industry and overall market benchmarks, ensuring that Exxaro's employee offering and remuneration philosophy are attractive to the external market as well as enable the talent retention strategy.
The pay-for-performance principle and the reward link to performance is at the core of the STI design driving a high-performance culture.
The STIs are created to foster a team-based, collaborative culture to deliver on business results.
Executive head: strategy and business transformation
Objective: Enable business ventures as a mechanism for creating exposure for Exxaro to horizon 3 and selected horizon 2 opportunities or threats
Outcomes:
Objective: Identify areas of cost reduction and savings across the Exxaro group.
Outcomes: To ensure competitiveness, Exxaro continuously focuses on its cost base. During the year, the executive head: strategy and business transformation was tasked to look at non-labour-related cost savings at corporate office. Cost and capital savings of 14.7% of the addressable base were identified and will be implemented.
Objective: Shape and deliver visible transformation to ensure empowered accountability
Outcomes:
Executive head: projects and technology
Objective: Identify areas of cost reduction and savings across the Exxaro group
Outcomes: To ensure competitiveness, Exxaro continuously focuses on its cost base. During the year, the executive head: projects and technology was tasked to look at non-labour-related cost saving at corporate office. Cost and capital savings of 14.7% of the addressable base were identified and will be implemented.
Objective: Monitor and give strategic guidance on the Moranbah South project charter and technical deliverables via the independent study manager to achieve alignment between joint venture parties to complete the prefeasibility study as per agreed timelines
Outcomes: An independent Moranbah South study manager was appointed in the fourth quarter of 2021 as agreed between joint venture partners and supported by the respective CEOs.
The study manager progressed according to the agreed scope, cost and schedule for the 2021 period. Due to the COVID-19 pandemic, in Australia, there were delays in the appointment of the study manager.
Objective: Contribute to the development of the energy strategy and develop the technical services model to support the energy SPV
Outcomes: A renewable energy 4.0 hub for projects and technology developed the RRODA tool for the energy leadership team and the CEO. This innovative project assessment tool was used with government officials, potential renewable customers and at executive committee and board level. Other project support was given to the energy team.
Executive head: stakeholder affairs
Objective: Effective use of stakeholder relations, networks and digital channels to share success stories of the Sustainable Growth and Impact strategy targeted at specific stakeholders as per the stakeholder relations plan and aligned to the Exxaro brand strategy (specific focus on equity shareholders and Impact investors)
Outcomes: The Sustainable Growth and Impact strategy is a transformative strategy aiming to transition Exxaro's business model from a coal-based business to a diversified minerals and energy solutions business. Given the potential impact of the strategy and collaborative approach in the development of impact initiatives, engagement with several key stakeholders was critical for buy-in as well as inputs and guidance.
Objective: Exxaro is participating in a collaborative regional platform with three impact investment projects in implementation and two in the pipeline for investment/implementation
Outcomes: Exxaro is a founding member of the Impact Catalyst, a regional collaborative platform, together with Anglo American, the CSIR, IDC and World Vision. The platform operates in Limpopo, Mpumalanga and the Northern Cape with the aim of developing catalytic projects that will impact across municipal boundaries. In locations where Exxaro operates, several projects are in development, beyond the existing SLPs such as community-oriented primary care in Lephalale for training healthcare workers who can provide home-based care (thus extending the local healthcare system – the programme has been proven in Mogalakwena), commencing with the feasibility study of a PPE factory in Lephalale, and, in Vhembe district, establishing the Mutale irrigation project near the closed Tshikondeni mine to support developing and established local farmers.
Objective: Identify areas of cost reduction and savings across the Exxaro group
Outcomes: To ensure competitiveness, Exxaro continuously focuses on its cost base. During the year, the executive head: stakeholder affairs was tasked to look at non-labour-related cost saving at corporate office. Cost and capital savings of 14.7% of the addressable base were identified and will be implemented.
Objective: Develop impact investment project package and raise third-party funding (domestic and/or offshore)
Outcomes: A total of 10 potential impact investment opportunities have been developed to concept level with the aim of developing rehabilitated land where Exxaro used to mine. These projects will drive the strategic objectives of Exxaro as a catalyst for economic development and environmental stewardship in communities that are vulnerable to the energy transition, thus providing resilience and opportunity to sustain themselves beyond coal. Several local and international potential investors have been approached and indicated interest in participating in this potential just transition initiative.
Executive head: sustainability
Objective: Divestment of ECC* section 11
* Divestment concluded in September 2021.
Outcomes: The Exxaro board and executive management have undertaken a strategic review of the current portfolio of coal operations and projects. The decision to divest Exxaro's entire interest in ECC* is in line with the portfolio optimisation portion of the strategy.
An application in terms of section 11 of the MPRDA allows the transfer of controlling interests in a company. The section 11 application for the transfer of controlling interest in ECC* was approved in July 2021 by the DMRE.
Objective: Leeuwpan divestment section 11
Outcomes: The Exxaro board and executive management have undertaken a strategic review of the current portfolio of coal operations and projects. The decision to divest Exxaro's entire interest in Leeuwpan is in line with the portfolio optimisation portion of the strategy.
An application in terms of section 11 of the MPRDA allows the transfer of mining rights. The section 11 application for the transfer of Leeuwpan mining rights was completed before the end of 2021.
Objective: Exxaro's COVID-19 vaccination programme execution as enabled by the South African government's procurement process
Outcomes: In response to the pandemic, the South African government approved two vaccines to be rolled out: Johnson & Johnson and Pfizer. These had to be procured through government. Through collaboration with government and Dis-Chem, Exxaro has been able to vaccinate 79% of the workforce with government supplying the vaccines.
Objective: Identify areas of cost reduction and savings across the Exxaro group
Outcomes: To ensure competitiveness, Exxaro continuously focuses on its cost base. During the year, the executive head: sustainability was tasked to look at non-labour-related cost savings at corporate office. Cost and capital savings of 14.7% of the addressable base were identified and will be implemented.
Performance contract period
The performance contract period was based on his start date in March to 31 December 2021.
Variable pay
The STI is measured over a 12-month period from March 2021 and will be paid three months after the review period ends based on the achievement of strategic objectives and financial targets. Individual performance is also measured over the period and considered in the payment of his STI. The remuneration committee will approve the targets and conditions for the new period as well as the achievement of targets and conditions for the previous period.
The STI and LTI is not disclosed in this report as any payments will be payable three months after his annual service date (employment date: 10 March 2021).
| Individual key objectives | KPIs | Weight | Rating | ||||||
| Strategic growth and financial performance |
Articulate the energy strategy into short, medium and longer-term horizons with milestones | 40% | 4 | ||||||
| Execution of the strategy with sufficient board oversight and tracking aligned to the energy strategy | 4 | ||||||||
| Advance own generation | 4 | ||||||||
| Build market intelligence | 4 | ||||||||
| Business transformation and operational excellence | Build internal capacity for energy strategy | 30% | 4 | ||||||
| Culture suitable for energy strategy with core principle of empowerment of people | 4 | ||||||||
| Distributed generation partner | 4 | ||||||||
| Cennergi master service agreement services roll-out | 4 | ||||||||
| Cennergi achieving its generation targets per approved budget: | 2 | ||||||||
| Availability as per approved budget for 12 months Financial targets as per approved budget for 12 months |
3 | ||||||||
| Finalisation of organisation design and talent (capability) requirements for approval | 3 | ||||||||
| Leading people change and social impact | Embed diversity and inclusion by demonstrable actions to question practices and break down any form of unintentional exclusions/differentiation related to race, gender, sexual orientation, religion, etc | 10% | 4 | ||||||
| Safety and business sustainability |
|
10% | 3 | ||||||
| Cost management and prudence | No overdue level 1 and 2 audit findings in area of responsibility | 10% | 3 | ||||||
| Performance rating | 3.45 |
We also disclose the outcome of the 2019 (and 2018) conditional LTIP awards that vest in April 2022 (and vested in April 2021).
Of the awards made in April 2019, 76.54% vest in April 2022. A summary showing the vesting percentages by vesting conditions for the awards appears in the table below.
| Performance vesting condition | Weight (%) |
2021 (%) |
2020 (%) |
| Headline earnings per share (HEPS) | 33.33 | 100.00 | 100.00 |
| TSR | 33.33 | 30.00 | – |
| ESG | 33.34 | 99.62 | 100.00 |
| Overall vesting | 76.54 | 66.67 |
2021 HEPS was 6 860 cents per share (cps) compared to the maximum vesting (100%) required at 3 163 cps.
2020 HEPS was 3 814 cps compared to the maximum vesting (100%) required at 2 775 cps.
2021 TSR was 30% and positioned 7th (1st Impala Platinum: 112%, 2nd Sibanye-Stillwater: 89%, 3rd Anglo Platinum: 67%, 4th Gold Fields: 55%, 5th Anglo American: 37%, 6th
AngloGold Ashanti: 31%, 8th BHP Billiton: 26% and 9th Sasol: -20%).
2020 TSR was 0% and positioned 8th (1st Impala Platinum: 64%, 2nd Anglo Platinum: 57%, 3rd Gold Fields: 50%, 4th AngloGold Ashanti: 49%, 5th Sibanye-Stillwater: 42%,
6th Anglo American: 31%, 7th BHP Billiton: 24% and 9th Sasol: -31%).
In both periods, a minimum of 3rd position was required to vest 100% of the TSR portion of awards.
The governance component of ESG resulted in an achievement at threshold (99.62% vesting) due to the actual portion of 99.92% over the three-year period. This results in
98.83% achievement for this portion based on the targets.
The table below illustrates the rights held by each participant, options exercised and shares forfeited due to performance conditions not being met in the review period, as well as shares forfeited as a result of resignation in the review period.
| Rights held at 31 December Number |
Exercisable period |
Proceeds if exercisable at 31 December1 R |
Pre-tax gain if exercisable at 31 December1 R |
Options exercised during the year Number |
Shares forfeited2 Number |
Sale price/ market price R |
Pre-tax gain R |
Date exercised |
|
| Executive directors | |||||||||
| MDM Mgojo | 01/04/2021 | 107 989 | 53 985 | 177.96 | 19 217 722 | 15/04/2021 | |||
| 01/04/2021 | 3 499 | 1 749 | 174.39 | 610 191 | 23/09/2021 | ||||
| 115 569 | 01/04/2022 | 17 667 033 | 17 667 033 | ||||||
| 181 029 | 01/04/2023 | 27 673 903 | 27 673 903 | ||||||
| 106 300 | 01/04/2024 | 16 250 081 | 16 250 081 | ||||||
| 402 898 | 61 591 017 | 61 591 017 | 111 488 | 55 734 | 19 827 913 | ||||
| N Tsengwa3 | 01/04/2021 | 39 177 | 19 585 | 177.96 | 6 971 939 | 15/04/2021 | |||
| 01/04/2021 | 1 270 | 634 | 174.39 | 221 475 | 23/09/2021 | ||||
| 42 320 | 01/04/2022 | 6 469 458 | 6 469 458 | ||||||
| 66 289 | 01/04/2023 | 10 133 599 | 10 133 599 | ||||||
| 80 115 | 01/04/2024 | 12 247 180 | 12 247 180 | ||||||
| 188 724 | 28 850 237 | 28 850 237 | 40 447 | 20 219 | 7 193 414 | ||||
| PA Koppeschaar | 01/04/2021 | 50 701 | 25 346 | 177.96 | 9 022 750 | 15/04/2021 | |||
| 01/04/2021 | 1 643 | 821 | 174.39 | 286 523 | 23/09/2021 | ||||
| 54 310 | 01/04/2022 | 8 302 370 | 8 302 370 | ||||||
| 85 072 | 01/04/2023 | 13 004 957 | 13 004 957 | ||||||
| 49 954 | 01/04/2024 | 7 636 468 | 7 636 468 | ||||||
| 189 336 | 28 943 795 | 28 943 795 | 52 344 | 26 167 | 9 309 273 | ||||
| Prescribed officers | |||||||||
| V Balgobind | 01/04/2021 | 21 434 | 10 714 | 177.96 | 3 814 395 | 15/04/2021 | |||
| 01/04/2021 | 695 | 347 | 174.39 | 121 201 | 23/09/2021 | ||||
| 22 938 | 01/04/2022 | 3 506 532 | 3 506 532 | ||||||
| 35 930 | 01/04/2023 | 5 492 619 | 5 492 619 | ||||||
| 20 503 | 01/04/2024 | 3 134 294 | 3 134 294 | ||||||
| 79 371 | 12 133 445 | 12 133 445 | 22 129 | 11 061 | 3 935 596 | ||||
| AS de Angelis4 | 01/04/2021 | 9 954 | 4 976 | 177.96 | 1 771 414 | 15/04/2021 | |||
| 01/04/2021 | 13 000 | 1 084 | 177.96 | 2 313 480 | 15/04/2021 | ||||
| 01/04/2021 | 323 | 161 | 174.39 | 56 328 | 23/09/2021 | ||||
| 01/04/2021 | 422 | 35 | 174.39 | 73 593 | 23/09/2021 | ||||
| 10 702 | 01/04/2022 | 1 636 015 | 1 636 015 | ||||||
| 33 410 | 01/04/2023 | 5 107 387 | 5 107 387 | ||||||
| 19 066 | 01/04/2024 | 2 914 619 | 2 914 619 | ||||||
| 63 178 | 9 658 021 | 9 658 021 | 23 699 | 6 256 | 4 214 815 | ||||
| JG Meyer | 01/04/2021 | 26 482 | 13 238 | 177.96 | 4 712 737 | 15/04/2021 | |||
| 01/04/2021 | 859 | 428 | 174.39 | 149 801 | 23/09/2021 | ||||
| 28 209 | 01/04/2022 | 4 312 310 | 4 312 310 | ||||||
| 44 185 | 01/04/2023 | 6 754 561 | 6 754 561 | ||||||
| 25 214 | 01/04/2024 | 3 854 464 | 3 854 464 | ||||||
| 97 608 | 14 921 335 | 14 921 335 | 27 341 | 13 666 | 4 862 538 | ||||
| MI Mthenjane | 01/04/2021 | 25 318 | 12 657 | 177.96 | 4 505 591 | 15/04/2021 | |||
| 01/04/2021 | 821 | 410 | 174.39 | 143 174 | 23/09/2021 | ||||
| 26 589 | 01/04/2022 | 4 064 660 | 4 064 660 | ||||||
| 41 649 | 01/04/2023 | 6 366 883 | 6 366 883 | ||||||
| 23 767 | 01/04/2024 | 3 633 261 | 3 633 261 | ||||||
| 92 005 | 14 064 804 | 14 064 804 | 26 139 | 13 067 | 4 648 765 | ||||
| AT Ndoni5 | 12 165 | 01/11/2024 | 1 859 664 | 1 859 664 | |||||
| 12 165 | 1 859 664 | 1 859 664 | |||||||
| SE van Loggerenberg6 | 01/04/2021 | 16 187 | |||||||
| 01/04/2022 | 11 146 | ||||||||
| 01/04/2023 | 17 458 | ||||||||
| 44 791 | |||||||||
| M Veti | 01/04/2021 | 24 972 | 12 483 | 177.96 | 4 444 017 | 15/04/2021 | |||
| 01/04/2021 | 810 | 404 | 174.39 | 141 256 | 23/09/2021 | ||||
| 26 226 | 01/04/2022 | 4 009 169 | 4 009 169 | ||||||
| 41 080 | 01/04/2023 | 6 279 900 | 6 279 900 | ||||||
| 23 442 | 01/04/2024 | 3 583 579 | 3 583 579 | ||||||
| 90 748 | 13 872 648 | 13 872 648 | 25 782 | 12 887 | 4 585 273 |
| 1 | Based on a share price of R152.87, which prevailed on 31 December 2021. |
| 2 | Shares forfeited due to performance conditions not being fully met. |
| 3 | Appointed to the board on 16 March 2021. |
| 4 | Appointed on 1 April 2020. |
| 5 | Appointed on 1 November 2021. |
| 6 | Resigned on 18 February 2021. |
DBP
The table below illustrates the rights held by each participant and options exercised.
DBP transaction details for executive directors and prescribed officers in 2021
| Rights held at 31 December Number |
Exercisable period |
Proceeds if exercisable at 31 December1 R |
Pre-tax gain if exercisable at 31 December1 R |
Options exercised during the year Number |
Sale price/ market price R |
Pre-tax gain R |
Date exercised |
|
| Executive directors | ||||||||
| MDM Mgojo | 09/03/2021 | 4 372 | 177.96 | 778 041 | 13/04/2021 | |||
| 09/03/2021 | 142 | 174.39 | 24 763 | 23/09/2021 | ||||
| 31/03/2021 | 11 139 | 177.96 | 1 982 296 | 13/04/2021 | ||||
| 31/03/2021 | 361 | 174.39 | 62 955 | 23/09/2021 | ||||
| 31/08/2021 | 1 036 | 174.39 | 180 668 | 01/10/2021 | ||||
| 1 460 | 15/03/2022 | 223 190 | 223 190 | |||||
| 8 618 | 31/03/2022 | 1 317 434 | 1 317 434 | |||||
| 13 122 | 31/03/2023 | 2 005 960 | 2 005 960 | |||||
| 1 319 | 31/08/2023 | 201 636 | 201 636 | |||||
| 867 | 19/03/2024 | 132 538 | 132 538 | |||||
| 9 070 | 31/03/2024 | 1 386 531 | 1 386 531 | |||||
| 988 | 21/09/2024 | 151 036 | 151 036 | |||||
| 35 444 | 5 418 325 | 5 418 325 | 17 050 | 3 028 723 | ||||
| N Tsengwa2 | 31/08/2021 | 274 | 174.39 | 47 783 | 01/10/2021 | |||
| 536 | 15/03/2022 | 81 938 | 81 938 | |||||
| 2 436 | 31/03/2022 | 372 391 | 372 391 | |||||
| 432 | 31/08/2023 | 66 040 | 66 040 | |||||
| 589 | 19/03/2024 | 90 040 | 90 040 | |||||
| 2 770 | 31/03/2024 | 423 450 | 423 450 | |||||
| 6 763 | 1 033 859 | 1 033 859 | 274 | 47 783 | ||||
| PA Koppeschaar | 31/08/2021 | 756 | 174.39 | 131 839 | 27/09/2021 | |||
| 5 543 | 31/03/2022 | 847 358 | 847 358 | |||||
| 4 778 | 31/03/2023 | 730 413 | 730 413 | |||||
| 1 004 | 31/08/2023 | 153 481 | 153 481 | |||||
| 750 | 21/09/2024 | 114 653 | 114 653 | |||||
| 12 075 | 1 845 905 | 1 845 905 | 756 | 131 839 | ||||
| Prescribed officers | ||||||||
| V Balgobind | 09/03/2021 | 1 089 | 177.96 | 193 798 | 16/04/2021 | |||
| 09/03/2021 | 36 | 174.39 | 6 278 | 23/09/2021 | ||||
| 31/03/2021 | 1 880 | 177.96 | 334 565 | 15/04/2021 | ||||
| 31/03/2021 | 61 | 174.39 | 10 638 | 23/09/2021 | ||||
| 31/08/2021 | 262 | 174.39 | 45 690 | 01/10/2021 | ||||
| 363 | 15/03/2022 | 55 492 | 55 492 | |||||
| 2 623 | 31/03/2022 | 400 978 | 400 978 | |||||
| 2 241 | 31/03/2023 | 342 582 | 342 582 | |||||
| 244 | 21/09/2024 | 37 300 | 37 300 | |||||
| 5 471 | 836 352 | 836 352 | 3 328 | 590 969 | ||||
| AS de Angelis3 | 1 092 | 31/03/2023 | 166 934 | 166 934 | ||||
| 466 | 31/08/2023 | 71 237 | 71 237 | |||||
| 202 | 19/03/2024 | 30 880 | 30 880 | |||||
| 1 269 | 31/03/2024 | 193 992 | 193 992 | |||||
| 227 | 21/09/2024 | 34 701 | 34 701 | |||||
| 3 256 | 497 744 | 497 744 | ||||||
| JG Meyer | 4 942 | 31/03/2023 | 755 484 | 755 484 | ||||
| 301 | 21/09/2024 | 46 014 | 46 014 | |||||
| 5 243 | 801 498 | 801 498 | ||||||
| MI Mthenjane | 09/03/2021 | 1 346 | 177.96 | 239 534 | 13/04/2021 | |||
| 09/03/2021 | 44 | 174.39 | 7 673 | 23/09/2021 | ||||
| 31/03/2021 | 2 331 | 177.96 | 414 825 | 13/04/2021 | ||||
| 31/03/2021 | 76 | 174.39 | 13 254 | 23/09/2021 | ||||
| 3 797 | 675 286 |
| Rights held at 31 December Number |
Exercisable period | Proceeds if exercisable at 31 December1 R |
Pre-tax gain if exercisable at 31 December1 R | Options exercisable during the year Number |
Sale price/ market price R |
Pre-tax gain R |
Date exercised |
|
| Prescribed officers | ||||||||
| M Veti | 09/03/2021 | 1 326 | 177.96 | 235 975 | 13/04/2021 | |||
| 09/03/2021 | 43 | 174.39 | 7 499 | 23/09/2021 | ||||
| 31/03/2021 | 2 314 | 177.96 | 411 799 | 13/04/2021 | ||||
| 31/03/2021 | 75 | 174.39 | 13 079 | 23/09/2021 | ||||
| 31/08/2021 | 312 | 174.39 | 54 410 | 01/10/2021 | ||||
| 433 | 15/03/2022 | 66 193 | 66 193 | |||||
| 1 730 | 31/03/2022 | 264 465 | 264 465 | |||||
| 682 | 31/08/2023 | 104 257 | 104 257 | |||||
| 449 | 19/03/2024 | 68 639 | 68 639 | |||||
| 3 180 | 31/03/2024 | 486 127 | 486 127 | |||||
| 278 | 21/09/2024 | 42 498 | 42 498 | |||||
| 6 752 | 1 032 179 | 1 032 179 | 4 070 | 722 762 |
| 1 | Based on a share price of R152.87, which prevailed on 31 December 2021. |
| 2 | Appointed to the board of directors on 16 March 2021. |
| 3 | Appointed on 1 April 2020. |
| DBP shares held as a percentage of NCOE at 31 December 2021 % |
DBP shares held at 31 December 2021 |
2019 DBP shares matched | |||
| Executive director and prescribed officers | R | Number | R | Number | |
| MDM Mgojo | 69 | 5 418 325 | 35 444 | 3 028 724 | 17 050 |
|---|---|---|---|---|---|
| N Tsengwa1 | 17 | 1 033 859 | 6 763 | 47 783 | 274 |
| PA Koppeschaar | 31 | 1 845 905 | 12 075 | 131 839 | 756 |
| V Balgobind | 24 | 836 352 | 5 471 | 590 969 | 3 328 |
| AS de Angelis | 15 | 497 744 | 3 256 | ||
| JG Meyer | 19 | 801 498 | 5 243 | ||
| MI Mthenjane | 675 286 | 3 797 | |||
| M Veti | 26 | 1 032 179 | 6 752 | 722 762 | 4 070 |
| AT Ndoni2 | |||||
| SE van Loggerenberg3 | |||||
| 1 | Appointed to the board on 16 March 2021. |
| 2 | Appointed on 1 November 2021. |
| 3 | Resigned on 18 February 2021. |
The MSR conditions have been met for 2021 in the personal share portfolios of Mxolisi Mgojo, Nombasa Tsengwa, Riaan Koppeschaar, Vanisha Balgobind, Mzila Mthenjane and Mongezi Veti (personal portfolio, including pledged shares).
The total single figure remuneration for executive directors and prescribed officers is stated in the table below to align with King IV disclosure. The 2021 LTIP reflected the 1 April 2018 LTIP award that will vest as a result of 2021 performance on 1 April 2021. Since the portion of the DBP voluntary deferral is included under the STIs, proceeds from the matched portion of the DBPs are reflected under LTIs.
| Year | NCOE R |
Recognition and other payments R6 |
STIs R |
LTIs R |
Total remuneration R |
|
| Executive directors | ||||||
| MDM Mgojo | 2021 | 7 901 087 | 180 482 | 4 079 336 | 15 062 971 | 27 223 876 |
|---|---|---|---|---|---|---|
| 2020 | 7 533 816 | 141 586 | 3 415 080 | 15 040 578 | 26 131 060 | |
| N Tsengwa1 | 2021 | 6 027 849 | 5 760 | 2 840 928 | 5 406 053 | 14 280 590 |
| 2020 | 4 788 451 | 2 500 | 1 931 182 | 5 456 521 | 12 178 654 | |
| PA Koppeschaar | 2021 | 5 997 927 | 7 760 | 3 018 760 | 7 201 992 | 16 226 439 |
| 2020 | 5 719 117 | 2 500 | 2 306 522 | 7 061 571 | 15 089 710 | |
| Prescribed officers | ||||||
| V Balgobind | 2021 | 3 509 586 | 22 096 | 1 520 708 | 3 140 369 | 8 192 759 |
| 2020 | 3 419 820 | 14 338 | 1 054 332 | 2 985 199 | 7 473 689 | |
| AS de Angelis2 | 2021 | 3 263 475 | 5 760 | 1 414 066 | 1 252 206 | 5 935 507 |
| 2020 | 2 915 100 | 2 500 | 945 100 | 1 386 371 | 5 249 071 | |
| AW Diedericks3 | 2021 | |||||
| 2020 | 4 057 728 | 2 500 | 1 352 442 | 3 592 398 | 9 005 068 | |
| JG Meyer | 2021 | 4 315 962 | 5 760 | 1 870 110 | 3 300 642 | 9 492 474 |
| 2020 | 4 205 568 | 2 500 | 1 401 716 | 3 688 320 | 9 298 104 | |
| MI Mthenjane | 2021 | 4 068 234 | 54 434 | 1 762 768 | 3 111 091 | 8 996 527 |
| 2020 | 3 964 176 | 2 500 | 1 321 260 | 3 526 283 | 8 814 219 | |
| AT Ndoni4 | 2021 | 445 858 | 700 000 | 81 726 | 1 227 584 | |
| 2020 | ||||||
| SE van Loggerenberg5 | 2021 | 322 975 | 2 475 940 | 2 798 915 | ||
| 2020 | 2 263 300 | 2 500 | 595 928 | 1 503 093 | 4 364 821 | |
| M Veti | 2021 | 4 012 608 | 5 760 | 1 738 666 | 3 399 275 | 9 156 309 |
| 2020 | 3 909 972 | 2 500 | 1 303 196 | 3 477 996 | 8 693 664 | |
| R Tatnall7 | 2021 | 5 657 129 | 5 657 129 | |||
| 2020 |
| 1 | Appointed to the board on 16 March 2021. |
| 2 | Appointed on 1 April 2020. |
| 3 | Not a prescribed officer in 2021. |
| 4 | Appointed on 1 November 2021. |
| 5 | Resigned on 18 February 2021. |
| 6 | Includes leave encashment, fatality-free and LTIFR recognition, long service awards, recognition awards, retention allowance and exit payment. |
| 7 | Appointed on 10 March 2021 in terms of a fixed-term employment contract. STI payment for 2021 will be based on his performance period from 10 March 2021 to 9 March 2022. Value still to be approved. |
The STIs are inclusive of the voluntary individual deferral made for 2021. The LTI reflects 76.54% award that will vest on 1 April 2022 based on a share price of R152.87 which prevailed on 31 December 2021.
The amount of R3 000 for fatality-free recognition and R2 760 for LTIFR recognition were paid for all directors and prescribed officers in 2021.
Leave encashment is included for MDM Mgojo: R130 721, V Balgobind: R16 336, MI Mthenjane: R44 974 and SE van Loggerenberg: R37 970.
Long service awards are included for MDM Mgojo: R44 000 and PA Koppeschaar: R2 000.
Recognition award is included for MI Mthenjane: R3 700.
Retention allowance is included for AT Ndoni: R700 000.
Exit payment is included for SE van Loggerenberg: R2 437 970.
DBP matching shares are not included under the 2020 LTIs.
An amount of R2 500 includes fatality-free recognition payment.
Leave encashment amounts are included for MDM Mgojo: R139 086 and V Balgobind: R11 838.
| 2021 | 2020 | ||||||||
| Fees for services R |
Benefits and allowances R |
Fees for services rendered to subsidiaries R |
Total R |
Fees for services R |
Benefits and allowances R |
Total R |
|||
| Non-executive directors | |||||||||
| GJ Fraser-Moleketi | 1 348 895 | 1 348 895 | 1 162 496 | 1 162 496 | |||||
| IN Malevu1 | 264 307 | 264 307 | |||||||
| L Mbatha | 667 102 | 61 184 | 728 286 | 582 337 | 582 337 | ||||
| VZ Mntambo | 694 100 | 108 012 | 802 112 | 728 933 | 728 933 | ||||
| MJ Moffett2 | 306 340 | 188 100 | 494 440 | 933 861 | 933 861 | ||||
| LI Mophatlane | 923 897 | 46 234 | 970 131 | 819 174 | 819 174 | ||||
| MLB Msimang3 | 438 671 | 438 671 | |||||||
| EJ Myburgh | 1 217 809 | 1 217 809 | 1 229 321 | 1 229 321 | |||||
| V Nkonyeni | 991 677 | 236 500 | 1 228 177 | 959 545 | 2 059 | 961 604 | |||
| CJ Nxumalo4 | 616 741 | 616 741 | |||||||
| MG Qhena (chairperson)5 | 1 267 377 | 1 267 377 | |||||||
| J van Rooyen6 | 878 214 | 878 214 | 2 128 588 | 2 128 588 | |||||
| A Sing7 | 294 136 | 294 136 | |||||||
| PCCH Snyders | 1 012 324 | 1 012 324 | 879 159 | 1 067 | 880 226 | ||||
| Total non-executive directors' remuneration | 10 627 454 | 640 030 | 11 267 484 | 9 717 550 | 3 126 | 9 720 676 | |||
1 Appointed on 22 June 2021.
1 Resigned on 11 May 2021.
2 Appointed on 15 March 2021.
3 Appointed on 1 February 2021.
4 Appointed on 19 April 2021.
5 Retired on 27 May 2021.
6 Retired on 28 May 2020.
Report Index