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BLUE LABEL INTEGRATED ANNUAL REPORT 2016
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Remuneration report
•
Incentive bonus
– a short-term
performance-related bonus
payment. The variable pay element
provided by the short-term bonus
plan is intended to enhance total
pay opportunities, should it be
merited by Group and individual
performance. The purpose of the
annual performance-related bonus
payment is to reward and motivate
the achievement of Group and
subsidiary financial targets, as well
as strategic and personal
performance. The Joint CEOs may
earn an annual incentive bonus of
up to 120% and the Financial
Director of up to 70% of
annualised fixed remuneration.
Senior Management may earn up
to 50% of their annualised fixed
remuneration.
•
Forfeitable share scheme
– a
long-term performance-related
incentive scheme. This incentive, in
the form of forfeitable shares
awarded in terms of the share plan,
is based on a percentage of total
annualised fixed remuneration. The
intention is to reward sustained
long-term performance and to align
the interests of the Executive
Directors and Senior Management
with those of shareholders.
•
Outperformance bonus
– a bonus
in the form of additional share
allocations to members of the
Executive Committee, linked to the
annual growth in the share price,
with the intention of recognising
and rewarding their contribution to
the overall strategy of the Group.
Fixed remuneration
Blue Label applies a discretionary
approach in all remuneration reviews
and there is no minimum across-the-
board increase to all employees.
Salary increases for the 2017 financial
year ranged from 0% to 6.5% (2016:
0% to 6%).Management of each
operating company were granted
discretion to apply an appropriate
increase, within the stipulated range,
to each staff member under their
control.
Details of the Directors’ remuneration
for the year ended 31 May 2016
appear on pages 136 and 137.
Incentive bonus plan
The Executive Directors and Senior
Management participate in an annual
incentive bonus structure which is
based on the achievement of
short-term performance targets.
These targets comprise financial and
non-financial components. The
financial performance component is
based on growth in core headline
earnings per share.
The non-financial elements include
the achievement of transformation
targets, progress in delivering the
Group’s growth strategy, rolling out
the Group’s transactional footprint,
the rate and level of progress in
respect of organisational development
and succession planning, together
with the application of leadership
qualities, corporate governance best
practices and risk mitigation.
For the 2016 financial year, the Group
achieved the levels required in terms of
its predetermined targets for growth in
core headline earnings per share. In
addition, the non-financial targets set
for the Executive Directors and Senior
Management were also achieved. As a
result, each Joint CEO was paid a
bonus of 120% of annual salary and
the Financial Director received a bonus
of 70% of annual salary.
The bonus parameters for Executive
Directors and Senior Management for
the 2017 financial year have been
determined as follows:
1. Executive Directors
Joint CEOs up to 120% of annual
salary, Financial Director up to 70% of
annual salary, of which 80% will
apply to financial criteria and 20% to
non-financial criteria.
•
Financial (80%):
– If growth in core headline
earnings per share is less than
CPI, no element of the 80% will
be paid.
– If growth in core headline
earnings per share is equal to CPI
plus 10%, then 70% of the 80%
will be paid, either in full or pro
rata, as the case may be.
– If growth in core headline
earnings per share exceeds CPI
plus 10%, then an additional
30% of the 80% will be paid.
•
Non-financial (20%):
The following criteria will be taken
into account in determining
qualification for the 20%: the
achievement of agreed transformation
targets, progress in delivering the
Group’s growth strategy, the roll out
of the Group’s transactional footprint,
the rate and level of progress made in
respect of organisational development
and succession planning, together
with the application of leadership
qualities, corporate governance best
practices and risk mitigation.
2. Senior Management
A maximum of 50% of annual salary
will be paid, of which 80% will apply
to financial criteria and 20% to
non-financial criteria.
The financial criteria will be split as to
60% on the performance of the
subsidiary which employs the person
concerned (where applicable) and
20% on Group performance.
•
Financial per subsidiary (60%):
– If growth in core headline
earnings per share is less than
CPI, no element of the 60% will
be paid.
– If growth in core headline
earnings per share is equal to CPI
plus 10%, then 70% of the 60%
will be paid in full or pro rata, as
the case may be.