I am pleased to present the remuneration committee report for the year ended 31 December 2024. The committee recognises the value of Exxaro's people in powering possibility, and strives to balance stakeholder interests with our commitment to fair and reasonable pay.
Dr Phumla Mnganga
Remuneration committee chairperson
The committee benefits from cross-membership with the nomination committee, allowing it to fulfil remuneration matters and board governance and nomination matters. The committee's terms of reference require the committee to comprise at least three non-executive directors, the majority being independent and the board chairperson being an ex officio member.
The board ensures committee members have a suitably balanced blend of skills and experience to enable the committee to discharge its functions, on recommendation from the nomination committee.
The committee comprises a majority of independent non-executive directors. There were neither retirees nor additional members to the remuneration committee in 2024, ensuring continuity in furthering the strategic objectives.
The CEO, FD and chief people and performance officer attend meetings as standing invitees to make submissions and provide information required by the committee.
Refer to board of directors for members' qualifications and experience, and more information in the remuneration report.
Gender and racial diversity
The committee met formally six times during 2024 at four quarterly meetings and two special meetings. The following table details members' attendance at meetings held during 2024:
| Members | Designation | Attendance at quarterly meetings | Attendance at special meetings |
| Dr Phumla Mnganga | Independent non-executive director and remuneration committee chairperson | 4/4 | 2/2 |
| Geraldine Fraser-Moleketi | Lead independent non-executive director | 4/4 | 2/2 |
| Zwelibanzi Mntambo | Non-executive director | 3/4 | 1/2 |
| Mvuleni Geoffrey Qhena | Independent non-executive director | 4/4 | 2/2 |
This committee's role and responsibility is to ensure the group remunerates fairly, responsibly and transparently to promote the achievement of strategic objectives and positive outcomes in the short, medium and long term. The committee ensures the continuous development, review and implementation of remuneration governance-related documents, including compliance with JSE Listings Requirements and reporting obligations.
The committee is accountable to the board for executing its independent and objective oversight. The committee does not assume the functions of management, which remain the responsibility of executives, prescribed officers and other members of senior management. The committee is not accountable for functions performed by other board committees.
Where board committee focus areas overlap with this committee's focus areas, committees collaborate to execute the board's broader effectiveness objective. For example, the committee plays a role in support of the DEI strategy execution, as it applies to fair pay or application of mechanisms to achieve and exceed employment equity.
The committee's annual work plan was reviewed in 2024 and amendments were approved by the board. These amendments assisted the committee in fulfilling its duties in a structured and measured manner.
The committee's terms of reference are reviewed annually. The review took place in the first quarter of 2025 and the revised terms of reference were subsequently approved by the board. The review ensured the terms of reference remain aligned to relevant legislation, regulations and King IV.
Although there is no legislative or regulatory requirement to conduct an annual external independent performance assessment, King IV recommends regular performance evaluations for all board committees. Independent assessments are conducted every third year in line with Exxaro's governance practices. An internal assessment was conducted in January 2025.
The committee fulfilled its mandate during 2024, and it remains an effectively functioning and contributing arm of the board.
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This committee is responsible for good governance in respect of remuneration matters. Flowing from the 2024 key focus areas, the following is reported:
With the promulgation of the Companies Amendment Bills 1 and 2 on the proposed amendments of the Companies Act, in March 2024 (only partially effective by 27 December 2024), the remuneration committee had been aware of the pending changes required for some time. In many cases the company already complies with the proposed changes, but where this is not the case, the legislative changes will be applied as required.
As part of the board's ongoing commitment to foster strong corporate governance and maintain transparent engagement with our shareholders, the chairpersons of the board, the remuneration committee, and the RBR committee conducted a governance roadshow to address shareholder concerns in October 2024.
| Outcomes of two non-binding advisory votes at the AGM on 23 May 2024 | For | Against |
| Non-binding advisory vote number 1: Approval of the Exxaro remuneration policy |
93.34% |
6.66% |
| Non-binding advisory vote number 2: Endorsement of the implementation of the Exxaro remuneration policy |
93.30% |
6.70% |
In terms of the JSE Listings Requirements paragraph 3.84(j), if either the remuneration policy or the implementation report or both are voted against by 25% or more of the votes exercised at the AGM, the board must invite dissenting shareholders to engage with Exxaro and provide the manner and timing of such engagement in the voting results announcement. Exxaro is pleased to report that the non-binding advisory vote number 2, "Endorsement and implementation of the remuneration policy" increased by 10.79% from the previous year.
Although engagement was not necessary, the board remains committed to meaningful engagements with stakeholders regardless of the outcome of the non-binding advisory vote.
Key concerns raised by shareholders and other stakeholders were addressed. Where applicable, we investigated the proposed changes. One concern was the performance conditions in the STI and LTI schemes. Exxaro performed detailed reviews on the following employee incentive schemes:
For each scheme, recommendations were made on how to better align market practices, consider different design options, and optimise the schemes for the benefit of both employer and employee. The remuneration committee gave its approval for and mandated management to further investigate the proposed changes and recommendations, and to propose a roadmap for their implementation.
The National Assembly approved the two-pot retirement system for implementation on 1 September 2024. The intention is to promote the preservation of retirement fund investments until members retire, while allowing them access to some of their accumulated savings during their working years.
The Exxaro retirement fund administrators have been aware of these pending legislative changes for many years and have advised that their processes and systems were ready for implementation long before the effective date. It was important for Exxaro to be collaboratively involved with the relevant funds in communicating and educating employees on the two-pot system to ensure that the changes were properly understood. Employees were advised that the savings pot withdrawal facility is intended for emergencies only and that it should be wisely considered before making withdrawals since the member would be borrowing from their future self which could negatively affect their retirement funding.
As part of the annual workplan of the committee, the remuneration committee was provided with an overview of the retirement funds, wellness programmes, group insurance funds, and medical aid schemes in comparison with a comprehensive benefits industry benchmark. On recommendation of the group executive committee, gap cover was approved for inclusion as an additional benefit. This benefit is fully funded by the employer for employees outside of the management and specialist category. Funeral cover was also approved to be offered to those employees who did not currently qualify for this benefit as part of their pension fund benefits. Again, this benefit is fully funded for employees outside the management and specialist category.
During 2024, Exxaro participated in an extensive and comprehensive benefits survey. This survey was conducted to benchmark the organisation's employee benefits against industry standards, enabling the committee to assess how our offerings compare with those of other organisations. Ninety-eight companies participated in the survey, with 17% being from the mining industry.
Through this process, we gained valuable insights into the competitiveness of our benefits offerings, which helped us identify areas where we are excelling and where there are opportunities for enhancement. Generally, the survey showed that Exxaro's benefits were in line with or better than the market. There were, however, a few benefits where we were slightly below the market, and we are reviewing these to ensure that our employee value proposition remains strong, supports talent retention and continues to attract top talent.
Recognition remains integral to Exxaro's total reward offering and our recognition events once again united teams at a functional and group level to celebrate our people's exceptional contributions and achievements. While recognition is important and was working well, a policy and programme review is underway to ensure alignment with the evolving needs of Exxaro, with the aim of continuing to foster a culture of appreciation and engagement. The outcome of the policy and framework review and recommended changes will be presented in 2025.
A thorough review of non-executive director fees was undertaken against a chosen comparator group. The remuneration committee extensively deliberated an updated fee structure. The updated structure reflects the scope and complexity of the roles, while maintaining alignment with the shareholder interests. The final recommendations will be presented to shareholders for approval at the 2025 AGM.
Key focus areas 2024/2025 |
| Continue on our wage gap journey as part of our DEI strategy by tracking our pay ratios and implementing appropriate interventions to close the wage gap, as required |
| Implement the incentive scheme changes arising from the reviews undertaken, in line with the associated roadmap and taking account of stakeholder feedback |
| Implement the minimum shareholding requirement (MSR) to ensure the interests of executives are more aligned with those of shareholders |
| Update the wage gap roadmap to reflect our ongoing commitment to narrowing the wage gap and continuous monitoring and corrective actions of horizontal wage gaps as part of ESG |
| Approve the revised recognition policy and programme |
| Ongoing consideration and deliberation of shareholder feedback |
| Review benefits and allowances, and implement proposed changes arising from the reviews undertaken |
The committee acknowledges that remuneration continues to be managed within the context of Exxaro's remuneration principles, policy and other guidelines, which enable sound governance and fair and responsible pay. The committee is satisfied that everything that they had committed themselves to for 2024 has either been successfully completed or is on track.
Dr Phumla Mnganga
Remuneration committee chairperson
15 April 2025
IR