Page 43 - Integrated Annual Report

PROVISIONS OF THE REMUNERATION POLICY
Executive directors:
HCI’s remuneration policy is aligned with its commitment to the principle of fair and responsible remuneration for all employees, based on their capabilities, skills and responsibilities. The committee takes cognisance of local best remuneration practices in order to ensure that such total remuneration is fair and reasonable to both the employee and the company. The committee utilises the services of independent remuneration consultants, as and when required, to assist in providing guidance on the remuneration for executive management. This philosophy’s intended consequence is to attract, retain and develop employees with scarce and critical skills who contribute to sustained business growth and who are aligned to the strategic and operational requirements of the business.
The remuneration structure of executive directors is linked to the group’s medium- to long-term business objectives and is therefore aligned to shareholder interests. The performance of the chief executive officer is evaluated by the board of directors. As management works together as a team, the performance of the chief executive officer reflects the performance of management as a whole. The annual pay increases of the executive directors are aligned to the annual increase parameters as determined by the remuneration committee.
The total remuneration packages of executive directors comprise:
• a guaranteed remuneration package;
• a short-term discretionary cash-based incentive bonus; and
• participation in the The HCI Employee Share Scheme.
Guaranteed salary:
A market related guaranteed remuneration is paid to executive management and staff irrespective of the group’s performance in order to attract and retain talented high-performing people.
Key employees and staff are entitled to leave benefits as per the Basic Conditions of Employment Act. Executive management and long-serving employees have been awarded with extra leave days. No further benefits are offered to key employees or staff. Salaries paid are cost to company.
Short-term incentive cash bonus:
Executive directors participate in the annual short-term cash-based incentive scheme. The sustainability of HCI’s business is critical in determining remuneration and the board is satisfied that the performance criteria do not encourage excessive risk-taking by the executives. A strong overlap of members sitting on the audit and risk committee and the social and ethics committee with that of the remuneration committee ensures that all stakeholder interests and the status of the company as a good corporate citizen is upheld and that the risk of the company is well-managed when the performance of executive management is under consideration.
The maximum bonuses that can be earned by executive management are as follows:
The annual discretionary short-term incentive scheme awarded to key employees is not based on predetermined performance targets but rather on comprehensive financial and non-financial performance.
The following performance measures and value drivers were considered in reaching a final bonus for executive management for recommendation to the board:
• Preservation of long-term growth of the share;
• Identification of new growth opportunities for the company;
• Protection of cash negative fast-growing assets in the company through cash-stressed COVID-19 conditions;
• Strategic direction for subsidiaries in dealing with COVID-19 related stress;
• Balancing long-term damage through dilution of shareholding against risk associated with trading one’s way out of the difficulties;
• Legal matters and other negotiations that are drivers of value creation;
• Sustainability of increased value delivered to shareholders over time; and
• The impact on all stakeholders.
To mitigate the risk of reckless pay-outs, an annual award is considered, as opposed to large once-off
Position
% of annual salary
Chief executive officer
75
Financial director
65
Other senior management
40-65
HOSKEN CONSOLIDATED INVESTMENTS LIMITED
INTEGRATED ANNUAL REPORT 2021 41