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BLUE LABEL INTEGRATED ANNUAL REPORT 2016
Remuneration report
The Board has delegated to the
Remuneration and Nomination
Committee (RNC) the responsibility of
determining the remuneration of the
Executive Directors and Senior
Managers, as well as to approve the
allocation of shares under the Group’s
forfeitable share scheme. The RNC
also fulfils the functions of the
Nomination Committee.
The RNC consists of three
Independent Non-Executive Directors,
namely Messrs GD Harlow (Chairman
of RNC), LM Nestadt (Chairman of
the Nomination Agenda of the RNC),
and JS Mthimunye. The chairpersons
respectively report to the Board on
deliberations and decisions. The Joint
CEOs and the Financial Director may
attend meetings of the RNC by
invitation, but do not vote on
decisions.
With regard to the annual salary
review of staff, the Group Head of
Human Resources presents
recommendations for consideration
by the RNC. The RNC formulates its
own proposals regarding the fee
structure for Non-Executive Directors
and the fees payable to members of
Board Committees for consideration
by the Board and ultimately, for
approval by shareholders.
Philosophy
Blue Label’s remuneration philosophy
is to recruit and retain staff, who
believe in and live the culture and
values of the organisation. In turn, the
remuneration policy strives to reward
employees in a fair and equitable way
in order to ensure a culture of high
performance through employees who
are motivated, engaged and who
subscribe to the principle of achieving
a balance between shareholder
interests and appropriate
remuneration packages.
Remuneration is designed to support
Blue Label’s business strategy and
vision, and to align with best
practices. Total rewards are set at
levels that are competitive in the
context of the relevant areas of
responsibility and the industry in
which the Group operates, with due
regard to market conditions. Total
incentive-based rewards are earned
through the attainment of demanding
key performance indices and targets,
consistent with shareholder growth
expectations.
The RNC is conscious of the fact that
succession planning is essential to
perpetuate institutional memory and
ensures that comparable alternative
candidates are in place for certain
identified positions.
During the year, the RNC reviewed its
philosophy, while also taking
cognisance of best peer practices. As
a result thereof, the RNC realigned
its policy with regard to the criteria
pertaining to the forfeitable share
plan as well as introducing
an outperformance bonus for
members of the Executive Committee.
Governance
Key duties of the RNC include:
•
ensuring that the Group upholds its
entrenched remuneration
philosophy;
•
ensuring that the combination of
fixed and variable pay is appropriate
when benchmarking remuneration
levels;
•
reviewing incentive schemes aligned
to growth in shareholder value;
•
reviewing incentive schemes to
ensure that they are administered
and implemented in terms of their
rules and performance targets;
•
reviewing remuneration of
Executive Directors and Senior
Management;
•
submitting recommendations to the
Board with regard to Non-Executive
remuneration for ultimate approval
by shareholders; and
•
managing stakeholder relations and
expectations, as deemed
appropriate on remuneration
matters.
In the course of deliberations, the
RNC considers the views of the Joint
CEOs on the remuneration and
performance of other Executive
Directors and Senior Management.
From time to time, independent
advice on market information and
remuneration trends is provided to the
RNC by external remuneration
consultants. Blue Label’s Human
Resources Department also assists the
Committee by providing supporting
information and documentation
relating to matters for its
consideration, including the
assessment of proposed changes to
legislation, such as determining the
employer’s responsibility to provide
retirement funding for staff. Ad hoc
consultations are held with key
institutional shareholders for their
comment and input.
Additional governance principles
applicable to the composition and
principal activities of the RNC are fully
set out on page 39 (Governance
Framework) of the integrated annual
report.
Policy
The remuneration of Executive
Directors and Senior Management is
determined on a total cost-to-
company basis, comprising four
components:
•
Fixed remuneration
– fixed
monthly salary and benefits. Fixed
remuneration is reviewed annually
in order to ensure that Executive
Directors and Senior Management,
who contribute to the success of
the Group, remain remunerated at
appropriate levels in accordance
with the remuneration philosophy.