Remuneration philosophy and policy
The objective of the remuneration policy is to align the performance of company executives with company commercial success and sustainability, simultaneously taking into account various stakeholders’ perspective and affordability/ cost to company. In developing the remuneration policy, the following factors were considered:
- motivating executives to achieve Tongaat Hulett’ business plan, business strategy and budgets;
- creating a strong, performance-orientated environment;
- attracting/motivating and retaining high caliber talent; and
- keeping within industry benchmarked pay levels.
These reward elements are structured to allow for appropriate differentiated reward for different roles and performance of executives, managers and employees, while attention is paid to the quantum of gaps between grades.
Rewards are linked to both individual performance and the performance of the company. From time to time, independent external studies and comparisons are used to ensure that compensation is market related, while the total cost to company is taken into consideration to determine quantum of pay overall. As a general principle, good performers are remunerated in line with the market median, with high achievers and exceptional performers being rewarded towards the market upper quartile.
Performance targets include financial and non-financial targets, and are set at various levels; being company-level targets, operating entity specific targets, team and individual performance levels. All targets are pre-determined and approved by the Remuneration Committee and the Board, and performance reviews are conducted at the end of each performance period for the various instruments in respect of annual targets and multi-year long-term incentive targets. The pre-determined performance targets for short-term goals are explained in the sections below. For long-term targets, a variety of relevant and appropriate measures are used, as detailed in the section on share incentives schemes below.
To ensure alignment with shareholder expectations, the performance targets are set for both short-term and long-term growth expected, and focus executives on both the business plan and long-term strategic aspirations and achievements of the company. The pay elements comprised guaranteed pay including benefits, variable short-term incentives and long-term incentives, which are also utilized as retention instruments for selected and key individuals in the company.
The company’s operating context and challenges, against the skills supply in each operating geography, is taken into consideration in utilizing the various pay instruments contained in the Tongaat Hulett remuneration practices. This is considered locally, in each country of operation, regionally as well as globally.
