Page 95 - Capricorn IAR 2020

Long-term incentives (“LTIs”)
Share appreciation rights (“SAR”) plan
Terms
Purpose Operation
Participants Performance period Plan limits
Performance conditions
Detail
To attract, retain and reward selected employees who can contribute to the trade of the Group and to stimulate the personal involvement of these employees, encouraging their continued service. The SAR plan serves as a leveraged incentive to employees to promote and align their interests with the shareholders of the company.
Participants receive conditional SARs which vest after three years, subject to the satisfaction of the performance condition and continued employment of the participant. After vesting, the SARs may be exercised up to five years after the
award date.
Executive directors, executive managers and selected members of senior and middle management
Three years
An aggregate limit applies between the SAR plan, the conditional share plan (“CSP”) and the share purchase scheme, being 7.5% of the issued shares of the company. An individual participant may not receive awards in excess of 10% of the overall company limit at any one time.
The performance condition applicable to all awards is achievement of budgeted cumulative profit after tax (“PAT”) and return on equity (“ROE”) over the performance period. The budget, in turn, reflects the expected outcome of the strategic plans and actions. The vesting period is three years.
2020 INTEGRATED ANNUAL REPORT
Conditional share plan (“CSP”)
Terms
Purpose
Operation
Participants Performance period Plan limits
Performance conditions
Detail
To attract, retain and reward selected employees who can contribute to the trade of the Group and to stimulate the personal involvement of these employees, encouraging their continued service. Under the CSP, participants receive conditional shares that vest after three years, subject to the satisfaction of the performance conditions over the performance period.
In certain cases, where a retention risk exists, conditional shares that vest after three years and are subject to the continued employment of the participant by the Group but are not subject to performance conditions, may be awarded.
Executive directors, executive managers and selected members of senior and middle management Three years
An aggregate limit applies between the SAR plan, the CSP and the share purchase scheme, being 7.5% of the issued shares of the company. An individual participant may not receive awards in excess of 10% of the overall company limit at any one time.
The performance condition applicable to all awards is achievement of budgeted cumulative PAT and ROE over the performance period. The budget, in turn, reflects the expected outcome of the strategic plans and actions.
Non-executive directors’ fees
The NEDs do not participate in any short- or long-term incentives and do not have contracts of employment with the company. Their fees are reviewed by the company and submitted to shareholders for approval on an annual basis.
NED fees reflect the directors’ roles and membership of the board and its committees. The NED fees have been benchmarked against the average of the median and upper quartile of medium-cap financial services companies listed on the JSE.
The resolution relating to NED fees for the 2020 financial year can be found in the notice of the AGM, available online.
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