|
During the year, 6 674 989 (2024: 17 000 314) conditional shares were granted to qualifying employees (participant).
The participant will forfeit the conditional shares if he/she ceases to be an employee of an employer company before
the vesting date or if the specified performance conditions have not been met, unless otherwise specified by the
rules or determined by the Board. In the event that the participant is not in the employ of the Group, or the
performance conditions are not met, the shares allocated to the participant will be forfeited and will either be sold
on the open market by the Escrow agent and the proceeds will be returned to the participating employer, or may be
retained by the Group for future awards.
Dividends declared in respect of conditional shares are held in Escrow until such time as the performance conditions
are met and the shares have vested. Shares forfeited during the vesting period will forfeit any dividends pertaining
to such shares. No dividends were declared during the current or prior year.
The performance conditions for the fourteenth award grant that vested on 31 August 2024 were as follows:
| |
Group long-term incentive (LTI) metrics* |
| |
|
Threshold |
Target |
Stretch |
| Core HEPS (30%) (compounded |
Group |
|
CPI + 2% |
CPI + 4% |
| cumulatively over three years) |
Vesting % |
|
30.0% |
42.0% |
Total shareholder return
(TSR) (30%)
(performance against JSE
Capped All Share Index) |
Group |
|
JSE Capped
All Share Index
Return+
CPI +5%
(average not
compounded over
three years) |
JSE Capped
All Share Index
Return+
CPI +15%
(average not
compounded over
three years) |
| |
Vesting % |
|
30.0% |
42.0% |
| Return on capital employed (ROCE)** (20%) (compared to weighted average cost of capital |
Group |
|
ROCE greater than
or equal to
WACC +1% over
three years |
ROCE greater than
or equal to
WACC +2% over
three years |
| (WACC) over the three-year period not compounded) |
Vesting % |
|
20.0% |
28.0% |
| Environmental, social and governance (ESG) (20%) (specific ESG metrics) |
Group |
|
Specific ESGs selected |
Specific ESGs selected |
| |
Vesting % |
|
20.0% |
28.0% |
| ESG and Individual performance measures |
Group |
Specific ESGs
selected and KPIs |
|
|
| |
Vesting % |
72.0% |
|
|
| * |
Remco may review metrics and targets post-FY2024 for new awards to ensure that they are relevant. The LTIP is calculated per
metric. Values awarded will be a weighted average of scores attained versus target. All metrics will be assessed and vest on a
pro rata basis applying linear interpolation basis save for the ESG, strategic and individual metrics which will be assessed on a
binary basis. |
| ** |
ROCE is calculated using the following formula:
ROCE = Net operating profit (EBIT)/Capital employed. Capital employed = total assets current liabilities (excluding interest-bearing
borrowings).
The Remuneration Committee will review any prior year impairments to assess if adverse outcomes have occurred, and if so, make
the necessary adjustments to the capital employed number such that the average performance is a more accurate indication to
shareholders over the measurement period. |
The performance conditions as at 31 May 2025 for the fifteenth award grant vesting on 31 August 2025 are
as follows:
| |
Group long-term incentive (LTI) metrics* |
| |
|
Threshold |
Target |
Stretch |
| Core HEPS (30%) (compounded |
Group |
|
CPI + 2% |
CPI + 4% |
| cumulatively over three years) |
Vesting % |
|
30.0% |
45.0% |
Total shareholder return
(TSR) (30%)
(performance against long bond
compounded over three years plus spread) |
Group |
|
Performance equal
to three to
five-year SARB
nominal long
bond rate +7.5%**) |
125% of target |
| |
Vesting % |
|
30.0% |
45.0% |
| Return on capital employed (ROCE)** (20%) (compared to weighted average cost of capital |
Group |
|
ROCE greater than
or equal to
WACC +1% over
three years |
ROCE greater than
or equal to
WACC +2% over
three years |
| (WACC) over the three-year period not compounded) |
Vesting % |
|
20.0% |
30.0% |
| Environmental, social and governance (ESG) (20%) (specific ESG metrics****) |
Group |
|
Specific |
No stretch |
| |
Vesting % |
|
20.0% |
28.0% |
| ESG and Individual performance measures |
Group |
Specific ESGs
selected and KPIs |
|
|
| |
Vesting % |
72.0% |
|
|
| * |
Remco may review metrics and targets post-FY2025 for new awards to ensure that they are relevant. The LTIP is calculated per metric. Values awarded will be a weighted average of scores attained versus target. All metrics will be assessed and vest on a pro rata basis applying linear interpolation basis, save for the ESG metric which will be assessed on a binary basis. |
| ** |
In setting the TSR target, consideration was given to utilise a risk-free rate that is aligned with a typical vesting and performance period of the award, consequently a 3-5 SARB nominal long bond rate was applied as the anchor in setting TSR targets, with an appropriate spread applied to this anchor in order to set realistic but stretching targets. In addition, TSR will be assessed based on growth in market cap as well as dividends distributed to shareholders over the performance period. |
| *** |
ROCE is calculated using the following formula:
ROCE = Net operating profit (EBIT)/Capital employed. Capital employed = total assets current liabilities (excluding interestbearing borrowings).
The Remuneration Committee will review any prior year impairments to assess if adverse outcomes have occurred, and if so,
make the necessary adjustments to the capital employed number such that the average performance is a more accurate
indication to shareholders over the measurement period. |
| **** |
Remco removed the stretch component of the ESG KPIs in the LTIP as these measures are assessed on a binary basis and only
provide for the achievement of target performance, with threshold performance being assessed on a pro rata basis relative
to target.
|
The performance conditions as at 31 May 2025 for the sixteenth and seventeenth award grants vesting on
31 August 2026 and 31 August 2027 respectively are as follows:
| |
Group long-term incentive (LTI) metrics* |
| |
|
Threshold |
Target |
Stretch |
| Core HEPS (30%) (compounded |
Group |
CPI |
CPI + 2% |
CPI + 4% |
| cumulatively over three years) |
Vesting % |
21.6% |
30.0% |
45.0% |
| Return on capital employed (ROCE)** (20%) (compared to WACC over the three-year period not compounded) |
Group |
ROCE greater than
or equal to WACC
over three years |
ROCE greater than
or equal to WACC
+1% over three
years |
ROCE greater than
or equal to WACC
+2% over three
years |
| Vesting % |
21.6% |
30.0% |
45.0% |
| Strategic performance scorecard (20%) |
Group |
Linked to strategic
milestones |
Linked to strategic
milestones |
Linked to strategic
milestones |
| |
Vesting % |
14.4% |
20.0% |
30.0% |
| Environmental, social and governance (ESG) (10%) (specific ESG metrics***) |
Group |
Pro-rata of target |
Specific |
No stretch |
| |
Vesting % |
7.2% |
10.0% |
10.0% |
| Personal performance (10%) (specific individual metrics***) |
Group |
Pro-rata of target |
Specific |
No stretch |
| |
Vesting % |
7.2% |
10.0% |
10.0% |
| * |
Remco may review metrics and targets post-FY2025 for new awards to ensure that they are relevant. The LTIP is calculated per metric. Values awarded will be a weighted average of scores attained versus target. All metrics will be assessed and vest on a pro rata basis applying linear interpolation basis save for the ESG, strategic and individual metrics which will be assessed on a binary basis. |
| ** |
ROCE is calculated using the following formula:
ROCE = Net operating profit (EBIT)/Capital employed. Capital employed = total assets current liabilities (excluding interestbearing borrowings).
The Remuneration Committee will review any prior year impairments to assess if adverse outcomes have occurred, and if so,
make the necessary adjustments to the capital employed number such that the average performance is a more accurate
indication to shareholders over the measurement period. |
| *** |
The stretch component of the ESG and Individual KPIs in the LTIP are assessed on a binary basis and only provide for the
achievement of target performance, with threshold performance being assessed on a pro rata basis relative to target. |
In determining the number of conditional shares that will vest due to performance conditions being met,
management assesses the attrition rates of staff based on the grades of staff that have been granted awards as well
as the historic staff turnover.
Movements in the number of conditional shares outstanding during the year are as follows:
|
|
Grant date |
Vesting date |
Number of shares |
Fair value
of grant
R'000 |
|
| At 1 June 2023 |
|
|
|
27 246 83 |
136 153 |
|
| 13th award |
|
|
|
11 619 396 |
37 182 |
|
| 14th award |
|
|
|
7 642 302 |
49 064 |
|
| 15th award |
|
|
|
7 985 185 |
49 907 |
|
| Granted during the year |
|
|
|
17 000 314 |
54 741 |
|
| 16th award |
|
23 October 2023 |
31 August 2026 |
17 000 314 |
54 741 |
|
| Awarded during the year – achievement of stretch targets |
|
|
|
1 075 066 |
3 440 |
|
| 13th award |
|
|
|
1 075 066 |
3 440 |
|
| Shares forfeited during the year |
|
|
|
(835 508) |
(5 278) |
|
| 13th award |
|
|
|
— |
— |
|
| 14th award |
|
|
|
(328 333) |
(2 108) |
|
| 15th award |
|
|
|
(507 175) |
(3 170) |
|
| Shares vested during the year |
|
|
|
(12 694 462) |
(40 622) |
|
| 13th award |
|
|
31 August 2023 |
(12 694 462) |
(40 622) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| At 31 May 2024 |
|
|
|
31 792 293 |
148 434 |
|
| 14th award |
|
|
|
7 313 969 |
46 956 |
|
| 15th award |
|
|
|
7 478 010 |
46 738 |
|
| 16th award |
|
|
|
17 000 314 |
54 741 |
|
| Granted during the year |
|
|
|
6 674 989 |
32 908 |
|
| 17th award |
|
19 November 2024 |
31 August 2027 |
6 674 989 |
32 908 |
|
| Shares forfeited during the year |
|
|
|
(4 172 301) |
(21 722) |
|
| 14th award |
|
|
|
(2 175 761) |
(13 969) |
|
| 15th award |
|
|
|
(437 134) |
(2 732) |
|
| 16th award |
|
|
|
(1 559 406) |
(5 021) |
|
| Shares vested during the year |
|
|
|
(3 014 702) |
(19 332) |
|
| 14th award |
|
|
31 August 2024 |
(2 882 727) |
(18 507) |
|
| 15th award |
|
|
19 December 2024 |
(107 352) |
(671) |
|
| 15th award |
|
|
22 May 2025 |
(24 623) |
(154) |
|
| At 31 May 2025 |
|
|
|
31 280 279 |
140 289 |
|
| 14th award* |
|
|
|
2 255 481 |
14 480 |
|
| 15th award |
|
|
|
6 908 901 |
43 181 |
|
| 16th award |
|
|
|
15 440 908 |
49 720 |
|
| 17th award |
|
|
|
6 674 989 |
32 908 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| * |
Although 2 255 481 shares vested to certain employees during the year, the transfer and/or sale of these shares were restricted due
to a closed period in terms of the JSE Listings Requirements. The shares will be transferred once the closed period expires. The
shares are included in treasury shares and management has concluded that no agency relationship exists over the shares while
these rights are restricted. |
Refer to note 5.2 for the expense recognised in the income statement relating to the equity compensation benefits.
The fair value of the shares is based on the open market closing price at grant date. The total number of conditional
shares issued to Executive Directors during the period is nil (2024: 4 596 356). The share-based payment expense
in relation to these Executive Directors is R13.4 million (2024: R12.2 million). Refer to note 5.3 for details of awards
per Director |
