Vodacom Integrated Report 2018

This report summarises Vodacom’s remuneration

philosophy and policy for executive and non-executive

directors. It also provides a description as to how the policy

has been implemented.

The detailed Remuneration report, including full disclosures

is published in a separate Remuneration report online at

www.vodacom.com

Letter from the Chairman of the

Remuneration Committee (RemCo):

Dear shareholders

As members of the RemCo, our focus is to assist and advise

the Board on matters relating to the remuneration of

senior management. We ensure that the remuneration

philosophy and policy supports the Group’s strategic

targets to enable the recruitment, motivation and

retention of senior executives, with the aim of maximising

shareholder value and complying with legislation and the

requirements of King IV.

This report sets out Vodacom’s remuneration philosophy

and policy for non-executive directors and executive

directors. It also provides a description of how the policy

has been implemented, and discloses payments made

to non-executive and executive directors during the year.

The committee has considered the disclosure requirements

of King IV (both principles and practice notes) and has

produced the following report, which complies with the

King IV requirements while being conscious of disclosing

individual or market sensitive information.

During the course of the year, we reviewed the roles and

accountabilities within the Group Executive Committee

and sought legal opinion regarding the definition of

prescribed officer. Based on all the available information

the RemCo is of the opinion that only the roles of CEO

and CFO meet the requirements of prescribed officer.

I would like to thank my fellow RemCo members for their

continued support, and look forward to the challenges

that lie ahead.

Thoko Martha Mokgosi-Mwantembe

Chairman of the Remuneration Committee

In accordance with the requirements of King IV, this

report is divided into the following three sections:

Section 1:

Background statement regarding committee

considerations and decisions.

Section 2a:

Our remuneration philosophy, policy and framework for

the current year.

Section 2b:

Our remuneration philosophy, policy and framework

for FY2019.

Section 3:

Implementation and remuneration disclosure of the CEO,

CFO and non-executive directors.

Vodacom Group Limited

Integrated report for the year ended 31 March 2018

Section 1:

Background statement regarding committee

considerations and decisions

Business performance and the impact on

our short-term and long-term incentives

The Group’s financial performance was good and we

delivered a solid set of results. This is testament to the

calibre of management and employees that work for the

Group. Management had a tough set of targets to achieve,

relating to service revenue, EBIT, operating free cash flow

and customer appreciation. Customer growth and the

strong demand for data were two of the key drivers of

success, along with excellent execution in our Enterprise

business. More detail on the actual achievement against

these targets is provided later in the report.

The targets and the extent to which they are achieved

have a direct impact on the long- and short-term

incentives payable to executives.

Achievement of policy objectives

The committee believes that the Vodacom remuneration

policy remains fit for purpose and achieves the high-level

objectives of ‘attraction, retention and performance

motivation’ of our staff. During the continuous

assessment of specific factors and metrics, the following

two policy changes were implemented for the 2018

reporting period:

Changing EBITDA to EBIT as one of the elements of the

financial targets in the short-term incentive (STIP)

scheme, with the aim of ensuring greater focus on

capital discipline; and

Increasing the weighting of direct telecommunications

sector competitors to approximately 25% within the

TSR peer group for the long-term incentive (LTIP)

scheme to ensure a more representative comparison

of performance to direct market competitors.

No changes were made to the remuneration mix for

executives, either at target or at maximum award levels.

The key decisions we took this year were to:

Approve increases and adjustments for executives,

senior management, and employees;

Review the configuration of both STIP and LTIP

schemes, and make changes where appropriate;

Approve short-term incentives for executives, senior

management, and employees;

Evaluate the LTIP vesting conditions for the 2014

scheme, and approve final vesting ratios;

Set performance conditions for long- and short-term

incentives for 2018; and

Review remuneration developments in local and global

best practice.

Remuneration report