Blue Label Telecoms Integrated Annual Report 2017

Remuneration report

Philosophy

Blue Label’s remuneration philosophy

is to reward employees and executives

in a fair and equitable way in order to

attract the best talent and ensure a

culture of high performance in the

execution and support of Blue Label’s

business strategy and vision. Rewards

are set at levels that are competitive

and drive performance in the short

and long term, ensuring alignment

with shareholder interests and

simultaneously promoting an ethical

culture and responsible corporate

citizenship. Incentive-based rewards

are earned through the attainment of

demanding key performance indices

and targets, consistent with

shareholder growth expectations.

We consult our key shareholders

on any proposed changes to our

remuneration and reward policy with

due cognisance given to the non-

binding advisory votes at the AGM.

Incentive packages, both short and

long term, are aligned with best

practice and benchmarked regularly

where we aim to be in the top quartile

of the peer review group. This review

is performed from time to time,

utilising the services of third-party

consultants. Our goal is to profile Blue

Label as an “employer of choice”,

enabling us to attract and retain the

best skills required in a constantly

evolving technology landscape,

enhancing our ethos of

entrepreneurship and innovation.

In the previous year we re-aligned the

criteria pertaining to the forfeitable

share plan as well as introducing an

outperformance bonus for senior

executives, further enhancing the

alignment of executive remuneration

with shareholder interests. The RNC

strives to meet all requirements of the

JSE and King IV and will take

cognisance at the AGM of any vote

against the remuneration and reward

policy of 25% or more of the votes

exercised and will, as a matter of

policy, engage where necessary to

ascertain the reasons thereof and

where legitimate reasonable

objections are raised, these will be

considered by RNC.

We are pleased to report that at

the 2016 AGM, votes in respect

of the non-binding advisory vote

on endorsement of the Group

remuneration policy was 97.73% in

favour, 2.24% against and 0.03%

abstained.

Governance

The Board has delegated to the

Remuneration and Nomination

Committee (RNC) the responsibility of

determining the remuneration of the

Executive Directors and Senior

Managers, as well as to approve the

allocation of shares under the Group’s

forfeitable share scheme. The RNC

also fulfils the functions of the

Nomination Committee.

The RNC consists of three Independent

Non-Executive Directors, namely

Messrs GD Harlow (Chairman of the

RNC), LM Nestadt (Chairman of the

Nomination Agenda of the RNC), and

JS Mthimunye. The chairpersons

respectively report to the Board on

deliberations and decisions. The Joint

CEOs and the Financial Director may

attend meetings of the RNC by

invitation, but do not vote on

decisions.

With regard to the annual salary

review of staff, the Group Head

of Human Resources presents

recommendations for consideration by

the RNC. The RNC formulates its own

proposals regarding the fee structure

for Non-Executive Directors and the

fees payable to members of Board

Committees for consideration by the

Board and ultimately, for approval by

shareholders.

Key duties of the RNC include:

ensuring that the Group upholds its

entrenched remuneration

philosophy;

ensuring that the combination of

fixed and variable pay is appropriate

when benchmarking remuneration

levels;

reviewing incentive schemes aligned

to growth in shareholder value;

reviewing incentive schemes to

ensure that they are administered

and implemented in terms of their

rules and performance targets;

reviewing remuneration of Executive

Directors and Senior Management;

submitting recommendations to the

Board with regard to non-executive

remuneration for ultimate approval

by shareholders;

managing stakeholder relations and

expectations, as deemed appropriate

on remuneration matters;

ensuring that the Group continues

to progress with race and gender

diversity on the Board and

committees; and

ensuring that the Group has

implemented succession planning at

both top level management and

subsidiary management level.

In the course of deliberations, the RNC

considers the views of the Joint CEOs

on the remuneration and performance

of other Executive Directors and Senior

Management.

BLUE LABEL

INTEGRATED ANNUAL REPORT 2017