1. PAY IN 2015 – A BRIEF UPDATE ON GLOBAL AND RSA TRENDS
3rd March 2015
Presented by: Lance Meiring
Principal Consultant

2. Global Trends in Remuneration
Global Research - Towers Watson
Sample: “Top 50” Companies in the S&P defined as companies with best 15 year track record of Total Shareholder Return.
Q. What are the “enduring” high performers doing to
design executive reward programmes tailored to meeting their unique business strategies and targets?
comply (concurrently) with governance, regulatory and third party constraints on remuneration policy?
25 April 2019
P E Corporate Services SA

3. Global Trends in Remuneration (cont’d)
A. Five key findings
1. Top performers allow compensation plans to evolve as the company grows and matures e.g. different incentives and different metrics as the organisation evolves.
fewer metrics in the early stages
less focus on l.t.i. in the early stages
2. High performers target market median fixed pay (1-3% below other listed concerns) but t.c.e % higher
3. Greater emphasis on share options than share awards (suggests greater short term emphasis). But greater focus on l.t.i. component of the pay mix
4. L.t.i. schemes place high emphasis on “shareholder return” measures (i.e. TSR/ROA/ROE vs. revenue and profit)
5. Executives in high performing companies are a bargain! (high compensation but even higher market cap).
25 April 2019
P E Corporate Services SA

4. Global Themes - What’s Working and What’s not Working in Executive Pay
Research by Towers Watson Global Databases
100 + Exec Compensation Professionals
Topia
What’s Working
What’s Not Working
Pay philosophy
Guaranteed pay at the median
High incentive earnings potential linked to strategy / goals & shareholder value creation
Piecemeal & static approaches
Incentives not reviewed regularly against business goals
Governance and disclosure
Boards & Remco’s handling pay policy more professionally
Greater sensitivity to external stakeholders
Remco’s adopting narrow, compliance approach with limited reference to strategy
Pay policy design & benchmarking
Best practice approaches
Annual market & peer group comparisons
Active & competitive market for talent
Benchmarking applied inconsistently & opportunistically
Goals linked to budget & not focussed on driving sustained outperformance (or performance requirements)
Performance-based pay
Pay linked to performance
Measures & targets set in advance & disclosed
Pay/performance reviews not structured regularly or effectively
Performance targets arbitrary & negotiable
Risk mitigation
Greater use of clawbacks & deferrals to align pay outcomes with long-term performance
Executive & shareholder interests not aligned
Executives lacking “owner mentality”

5. Key Pay Issues - South Africa 2015
“All’s Fair” – Equal Pay for Equal Work
Remco’s are becoming more involved in pay policy at all levels
internal and external equity principles will remain under close scrutiny
Department of Labour - Draft Code of Good Practice on Equal Pay for Equal Work
employer guidelines on eliminating unfair discrimination
focus on achieving / implementing equality
objective basis for measuring job relativities and justifying differentiation in pay and benefits
job evaluation based assessments
talent attraction and retention
managing the bargaining unit
balanced pay mix at executive level
25 April 2019
P E Corporate Services SA

6. P E Corporate Services SA
Pay Disclosure - Trends
(“Top 80” Survey of Remuneration Policy Disclosure)
Percentage of Companies
2012
2013
 2014
35%
61%
 60%
54%
63%
 71%
24%
69%
 75%
75%
95%
 98%
13%
22%
 24%
30%
40%
 43%
76%
83%
 82%
n/a
60%
 65%
Remco mandate has been extended to cover remuneration policy at all levels
Pay negotiated on total guaranteed package basis
How guaranteed package is determined and any subsequent revisions explained in detail
Form of s.t.i scheme disclosed
S.t.i. target setting policy disclosed
Pay mix is disclosed
Basis of l.t.i. awards disclosed
Remuneration of prescribed officers disclosed
25 April 2019
P E Corporate Services SA

7. P-E Corporate Services SA
25 April 2019
P-E Corporate Services SA