Nomination and remuneration committee REPORT
Chairman of the
“The remuneration committee has placed focus on the establishment of a sound foundation that drives fair and responsible remuneration. Further to that focus has been placed on business sustainability through the implementation of governance structures for remuneration and the development of a fit for purpose policy”
Focus for 2021
- Socialisation and embedment of remuneration policy
- Group standard on grading and payscales
- Director training
- Implementation of EVP:
- Performance Management
- Learning and Career Management
- Talent Management
|The committee comprises three independent non-executive directors and is chaired by an independent non-executive director. The membership of the committee is as follows:|
|Mr Sipho Ngidi||Chairperson of the committee|
|Mr Ismail Mamoojee|
|Mr Mike Bosman|
|Dr Moretlo Molefi**|
Attendees at committee meetings include the Chief Executive Officer, the Chief Financial Officer, Chief Risk Officer, the HR Director, the Company Secretary and other persons with specific skills and expertise to assist the committee in the discharge of its functions.
The number of meetings and attendance per committee member is shown in the attendance table.
The Board is satisfied that the members of the committee have the necessary skills and experience to enable the committee to fulfil its duties. Summaries in the EOH board of directors provide an overview of the directors' qualifications and experience.
|*||Resigned: 28 July 2020|
|**||Resigned: Effective 20 January 2021|
Role of the committee
The Committee assists the board in exercising its function to ensure that the Group remunerates its employees fairly, responsibly and transparently by, among others, implementing affordable, competitive and fair reward practices, so as to promote the achievement of strategic objectives and positive outcomes in the short, medium and long term.
Role and responsibilities – Remuneration:
- ensure that the remuneration policy promotes the achievement of strategic objectives and encourages individual performance;
- annually review the remuneration strategy and policy (including higher-level strategic principles that would inform the policy and implementation thereof) and oversee the implementation of the policy over an annual cycle to ensure its continued relevance;
- ensure that executive directors are remunerated for their contribution to the Group's overall performance, after giving due regard to the interest of the shareholders and to the financial and commercial health of the Group;
- advise on the remuneration of non-executive directors;
- ensure that the Company remunerates directors, management, and employees fairly, responsibly and transparently and oversees the setting and administering of remuneration at all levels in the company;
- approve material Human Resources policies for the EOH Group;
- approve proposals on new short- and long-term incentive schemes and where appropriate make recommendations to the board for approval by shareholders.
Role and responsibilities - Remuneration Report:
- oversee the preparation of the Remunerations Committee's report, which includes a background statement, the overall remuneration policy and the implementation report which forms part of the Annual Integrated Report.
- review the outcome of the implementation of the remuneration policy, as to whether the policy promotes the achievement of strategic objectives and encourage individual performance. The Committee will recommend the necessary improvements to the board in this regard.
- ensure that the remuneration policy is put to a non-binding advisory vote at the general meeting of shareholders once every year.
- ensure that the process set out in King IV relating to shareholders' engagement if the remuneration policy or the remuneration report (or both) have been voted against by 25% or more of the voting rights at the general meeting of shareholders is followed.
Role and responsibilities – Nomination of Directors:
- regularly review the board and board committees' skill, knowledge, expertise, structure, size and composition, and make recommendations to the board with regard to any adjustments and/or appointments and/or establishment that are deemed necessary;
- establish a formal and transparent procedure for the appointment of directors:
- identifying and participating in the selection of suitable candidates to be recommended to the board for appointment as executive and non-executive directors; and
- review the results of background checks on potential candidates prior to their nomination taking into account the provisions of section 69 and 162 of the Companies Act and the recommendations of King IV on Corporate Governance for South Africa, 2016 (King Code) relating to the attributes of directors in general.
- make recommendations to the board on the appointment, removal, and resignation of executive and non-executive directors;
- review and report to the board on the adequacy of the succession planning policies for the board chairman, chief executives and executive directors;
- identify individuals qualified to be elected as members of the board and board committees and recommend such individuals to the board for appointment in terms of the Company's MOI and establish a procedure to ensure that the selection of individuals for such recommendation is transparent;
- annually review the independence of non-executive directors, taking into account all applicable corporate governance requirements and make recommendations to the board;
- ensure that directors undergo proper 'on-boarding'/induction;
- ensure that directors receive on-going training as and when required; and
- assist the Chairperson and the board in evaluating the performance of the board, its committees and individual directors.
Terms of service
- The minimum terms and conditions applied to South African executive directors are governed by legislation. The notice period for these directors is three months. In exceptional situations of termination of the executive directors' services, the Remuneration Committee (assisted by independent labour law legal advisers) oversees the settlement of terms.
- Executive directors are permitted to serve as non-executive directors on one other public company board with the express permission of the Chief Executive and the Nominations Committee. This excludes directorships where the Group holds a strategic investment in that public company (i.e. nominee directorship).
- Fees paid to nominee directors accrue to the Group and not to the individual directors concerned.
- Non-executive directors are appointed by the shareholders at the AGM. Interim board appointments are permitted between AGMs. Appointments are made in accordance with Group policy. Interim appointees retire at the next AGM when they may make themselves available for re-election.
Shareholder vote on the remuneration policy and the implementation report
At the Annual General Meeting on 5 December 2019 the Company did not receive the required number of votes in favour of the remuneration policy and the implementation report. The results of the voting were as follows:
- Remuneration policy 34.64% in favour
- Implementation report 34.64% in favour
Following further engagement with shareholders, the Company determined that shareholders were concerned about the level of disclosure around performance targets which made it difficult to assess the reasonability of variable remuneration outcomes. The Company has taken these concern into consideration in its detailed review of our remuneration policy that will be presented to shareholders at the annual general meeting (AGM) to be held 20 January 2021.
Other than shareholder engagement at the AGM, no further shareholder concerns were received by the Remuneration Committee subsequent to the meeting notwithstanding an invitation by EOH to those shareholders who voted against the aforementioned resolutions, to engage with EOH in writing.
ACTIVITIES DURING THE YEAR
The committee met three times during the year to discharge its responsibilities.
The committee’s key focus areas for the 2020 financial year included:
|Nomination of directors||
The committee is satisfied that it discharged its responsibilities in accordance with its terms of reference during the year.
Mr Sipho Ngidi
Chairperson, Remuneration and Nomination Committee
1 December 2020