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Short-term incentives
Long-term incentives
Incentive bonus
Forfeitable share scheme
Outperformance
bonus
Purpose
Reward and motivate the achievement of Group and
subsidiary financial targets, as well as strategic and
personal performance
Reward sustained long-term performance and to align
the interests of the Executive Directors and senior
managers with those of shareholders
Linked to the annual growth in
the share price, with the
intention of recognising and
rewarding their contribution to
the overall performance of the
Group
Application
dependent on
employee type
and level
All Executives and senior managers – Performance based
All other employee levels receive a 13th cheque
All Executives and senior managers
Executives and identified Key
Senior Management
Operational
and
performance
measures
Executives and senior managers:
An annual incentive bonus structure which is based on
the achievement of short-term performance targets and
is measured against the achievement of financial (80%
weighting) and non-financial (20% weighting) metrics
The Joint CEOs may earn a maximum annual incentive
bonus of up to 120% and the Financial Director of up to
70% of annualised fixed remuneration. Senior
Management may earn up to 50% of their annualised
fixed remuneration
For senior managers the financial (80%) metrics are
further split between the performance of the subsidiary
(60% of the 80%) and on Group performance (20% of
the 80%)
The following criteria will be taken into account in
determining qualification for the non-financial metrics
(20%):
X
the achievement of agreed transformation targets;
X
progress in delivering the Group’s growth strategy;
X
the roll-out of the Group’s transactional footprint;
and
X
the rate and level of progress made in respect of
organisational development and succession planning,
together with the application of leadership qualities,
corporate governance best practices and risk
mitigation.
Targets comprise retention and financial measures with
the financial measures split between core headline
earnings growth and shareholder returns. Allocations
have been made for the 2014, 2015 and 2016 share
scheme in those relative years. The 2017 share scheme
was allocated in September 2017.
The quantum of shares to be awarded is calculated on
an annual basis, based on a percentage of the recipient’s
annual cost to company, on the following basis:
X
Executive Directors 35%
X
Senior managers 18% or 25%
The financial performance criteria for the forfeitable
shares allocated in 2017 to senior managers will be
measured on vesting at subsidiary level as opposed to
group level that was the case in 2016.
The vesting criteria comprise:
X
retention;
X
growth in core headline earnings per share; and
X
growth in shareholder returns over the three-year
vesting period measured with reference to the
compounded growth in the weighted average
price per share during the month of the
commencement of the allocation plus dividends
over the three-year period against the weighted
average share price for the month during which
the vesting takes place.
This bonus, awarded in shares,
is earmarked for Executives and
identified Senior Management
and will be based on the
growth in the share price
The quantum of shares to be
awarded will be calculated on
an annual basis at the end of
each financial year and at the
ruling share price at that date.
50% of the award will vest one
year later and a further 50%
one year thereafter, on the
proviso that the recipients
remain in the employ of the
Company throughout the
relative vesting periods
Vesting Criteria
The 80% financial component is based on the
achievement of core headline earnings growth in
comparison to CPI. This financial element will be earned
in the following percentages if core headline earnings
per share is:
The vesting criteria for the 2017 share scheme
allocation, the measurement period being 1 June 2017
to 31 May 2020 are as follows:
The percentage of annual cost
to company that can be earned
based on the growth in the
share price is within the
following ranges of share price
growth:
Executive
Directors
Senior
managers
X
Below 15%
growth
0%
Retention (3 years from date of
award)
33,33% 40%
Executive
Directors
Senior
managers
Growth in core headline
earnings per share:
X
Between
15% and
20% growth
Pro rata
to 50%
X
Less than CPI
0%
0%
X
is 5% above CPI
compounded annually over
three years, then 20% of
the 33.33% / 30% will vest
6,7% 6,0%
X
Equal to CPI plus
10% (or Pro-rated
as the case may
be)
70% of the
80% at
Group level
70% of the
60% at
subsidiary level;
and 70% of
the 20% at
Group level
X
20% or
more
growth
50%
X
between 5% and 10%
above CPI compounded
annually over three years,
then 70% of the 33.33% /
30% will vest; and
6.7% to
23.3%
6% to
21%
X
Greater than CPI
plus 10%
100% of the
80% at
Group level
100% of the
60% at
subsidiary level;
and
100% of the
20% at Group
level
X
between 10% and 25%
above CPI compounded
annually over three years,
then 100% of the 33.33% /
30% will vest.
23.3% to
33.33%
21% to
30%
The 20% non-financial component is based on the
achievement of criteria, as mentioned above.
Growth in shareholder return
33.33% 30%
Refer to note 5.1 in the Group annual financial statements
for the vesting criteria on the 2014, 2015 and 2016 schemes.
BLUE LABEL
INTEGRATED ANNUAL REPORT 2017
59
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