73 / 98
69
Our business
Our performance
Our governance
Administration
Pay mix
RemCo reviews the total pay mix of executives every year and
decides on the proportion of total remuneration paid as part of
the GP, or as STIP or LTIP. Each element is linked to creating
shareholder value and the strategic progress made in the year.
The RemCo also reviews targets and the on-target values for each
element every year to ensure that it remains relevant, competitive,
drives the right behaviours and enhances overall shareholder
value. The pay mix for the CEO and CFO is shown below:
CEO
(%)
Min
On target
Max
STIP
GP
Match
LTIP
0
100
200
300
400
500
600
700
800
CFO
(%)
Min
On target
Max
STIP
GP
LTIP
0
100
200
300
400
500
600
700
800
The pay mix indicated above is based on the following
parameters and assumptions:
g
g
As described later in the STIP section, the maximum STIP for
the CEO is 2.0 times the target. This is the maximum business
performance multiplier as no personal multiplier is applicable
to the CEO.
g
g
The CFO maximum STIP is 3.0 times the target since he may
receive a maximum personal multiplier of 1.5 times in addition
to the maximum business performance multiplier of 2.0 times.
g
g
Similarly to the STIP, the CEO does not have an individual
performance multiplier on LTIP; hence, maximum represents
the face value shares awarded, whereas on target represents
the number of shares that are anticipated to vest (50% of face
value awarded).
g
g
The CEO participates in a matching arrangement based on
1.0 times guaranteed package where, dependent on targets
achieved, the match may rise to a maximum of 2.5 times
guaranteed package.
g
g
For the CEO dividends are received in cash on all outstanding
unvested LTIP awards at each dividend declaration date. Since
the dividend varies from period to period, it has not been
included in the pay mix depiction indicated above.
g
g
The CFO participates in the Vodafone share scheme and
qualifies for dividend equivalent shares only at the end of the
vesting period and only based on the vested portion of
performance shares.
Benchmarking
To ensure we apply the right pay mix and remunerate our
executives competitively, we use industry- and country-specific
benchmarks. Fair and competitive reward is vital to being an
employer of choice. RemCo sets the remuneration and the
guaranteed packages of executives by looking at peer group data
from the JSE telecommunications sector and other listed
companies of similar market capitalisation and revenue.
Executive directors and senior management
remuneration
Benchmarking for executives within Vodacom is done for all
elements of targeted remuneration, namely guaranteed package,
target short-term incentive and target long-term incentive.
Vodacom targets median remuneration for target performance.
The CEO is benchmarked against an executive remuneration
survey provided by Mercer, as well as industry-specific comparators
and disclosed information from peer group disclosure. The CFO is
a secondee from Vodafone and is thus benchmarked in terms of
the Vodafone executive remuneration policy. The balance of the
Vodacom senior leadership team (SLT) are benchmarked against
the annual executive survey provided by Mercer.
LTIP TSR peer group
Vodacom utilises the Indi25 as the most representative list of
companies, which can be compared from perspectives of industry
competitors, labour market and company size.
LTIP awards made during the year ending 31 March 2018, use the
following peer group companies for the LTIP TSR vesting condition:
g
g
Aspen Pharmacare Holdings
g
g
Bidvest Group
g
g
British American Tobacco Plc
g
g
Compagnie Financiere
Richemont AG
g
g
Imperial Holdings
g
g
Kumba Iron Ore
g
g
LIFE Healthcare
g
g
Mondi Ltd
g
g
Mondi Plc
g
g
Mr Price Group
g
g
MTN Group
g
g
Naspers
g
g
Netcare
g
g
Pioneer Food Group
g
g
Remgro
g
g
Sasol
g
g
Shoprite Holdings
g
g
Steinhoff International
Holdings NV
g
g
Telkom SA SOC
g
g
The Foschini Group
g
g
Tiger Brands
g
g
Truworths International
g
g
Woolworths Holdings
The RemCo approved an increase to the weighting of direct
telecommunications sector competitors with effect from the
June 2017 allocation, as a result the assessment of TSR is
performed with two additional instances of MTN and Telkom
respectively, in combination this equates to 25% of the
TSR peer group.
Telkom is not currently present in the Indi25, but since it is a direct
competitor for Vodacom, the RemCo took the decision to include
Telkom in the LTIP TSR peer group, irrespective of whether it is in
the Indi25 or not.