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Remuneration report

Human resources and remuneration committee and its role

The human resources and remuneration committee, chaired by Mrs Ruda Landman, comprises only independent non-executive directors. Mr Ton Vosloo chaired the committee for most of the year until his resignation on 21 November 2013. Mrs Ruda Landman and Mr Neil van Heerden were appointed as members of the committee on 21 November 2013. Non-executive directors and certain members of management attend meetings by invitation as appropriate.This committee met four times during the past financial year.

The main responsibilities of the human resources and remuneration committee are to:

  • determine and approve the group’s general remuneration policy, which must be tabled at each annual general meeting for a non-binding advisory vote by shareholders
  • prepare an annual remuneration report for inclusion in the company’s integrated annual report
  • annually review and approve the remuneration packages of the most senior executives, including incentive schemes and increases, ensuring they are appropriate and in line with the remuneration policy
  • annually appraise the performance of the chief executive
  • review the remuneration of non-executive directors of the board and its committees annually. Proposals are to be recommended to the board for final approval by shareholders at the annual general meeting. Remuneration must be approved by shareholders in advance
  • fulfil delegated responsibilities on Media24 group’s share-based incentive plans, for example appointment of trustees and compliance officers
  • approve most senior appointments and promotions
  • review incidents of unethical behaviour by senior managers and the chief executive
  • annually review the company’s code of ethics and business conduct
  • annually review the committee’s charter and, if appropriate, recommend required amendments for approval by the board
  • approve amendments to the Media24 group’s share-based incentive plans
  • perform an annual self-assessment of the effectiveness of the committee, reporting these findings to the board of directors, and
  • review employment equity and skills development plans in the workplace.

Remuneration strategy and policy

Media24’s remuneration strategy aims to attract, motivate and retain competent leaders in its drive to create sustainable shareholder value. We aim to recognise top performance and attract entrepreneurs, and the best creative engineers and journalists to grow the value of the group.

Our remuneration policies and practices align the remuneration and incentives of executives and employees to the group’s long-term business strategy.

Primary objectives include:

  • the need to promote superior performance
  • direct employees’ energies towards key business goals
  • achieve the most effective returns for employee spend
  • address diverse needs across differing cultures, and
  • have a credible remuneration policy.

Media24 has an integrated approach to reward strategy, encompassing a balanced design, in which reward components are aligned to the strategic direction and business-specific value drivers of Media24.

Overview of remuneration

Non-executive directors receive annual remuneration as opposed to a fee per meeting. This recognises the ongoing responsibility of directors for the efficient control of the company. This remuneration is augmented by compensation for services on committees of the board and boards of subsidiaries. A premium is payable to the chair of the board, as well as to the chairs of the committees.

Independent advice is acquired to help the human resources and remuneration committee to review directors’ remuneration annually. This remuneration is not linked to the Media24 share price or performance. Non-executive directors do not qualify for allocation of shares in terms of the group’s incentive schemes. The board annually recommends the remuneration of non-executive directors for approval by shareholders in advance.

In remunerating executives, the group aims to attract, motivate and retain competent and committed leaders in its drive to create sustainable shareholder value. We aim to recognise top performance and attract entrepreneurs, and the best journalists and engineers to grow the value of the group. The remuneration policy is aimed at meeting this objective. Accordingly, the focus is not primarily on the guaranteed annual remuneration package, but on individual incentive plans linked to the creation of shareholder value.

In this context Media24 usually structures packages on a total cost-to-company basis (which incorporates base pay, and may include a car allowance, pension, medical aid and other optional benefits). In addition, most executives qualify for individual and/or team performance incentives.At senior level we avoid standardised packages and aim to tailor the compensation structure to the needs of the specific business.

Remuneration packages are received annually and monitored and compared with reported figures for similar positions to ensure they are fair and comparable. Packages in the Media24 group are structured to be in line with the median of the market, but with the proviso that for key talent, both professional and executive, a positioning closer to or at the upper-quartile level of peer companies is required.We have no specific group policy to, for example, pay the median.

Most executives have an annual cash bonus scheme, provided that strategic and operational objectives are met.

Annual bonus

The annual bonus may comprise a variable component based on achieving financial and operational objectives, as well as fixed amounts for achieving specific discrete objectives.The incentive for each executive is agreed annually in advance.The incentives are based on targets that are verifiable and aligned to the group’s business plan, risk management policy and strategy. If targets are not met, no bonus is paid.

Long-term incentives

Long-term incentives are generally share-based incentive schemes in respect of Media24 shares and/or shares or appreciation rights in the respective companies or subsidiaries. These awards normally vest over a period of four or five years and must be exercised within five to 10 years from the date of grant.The shares/ appreciation rights are not free. The employee is offered the shares/appreciation rights at market value on the day of the award. Employees therefore benefit only if they, together with colleagues in that unit, can create additional value over the vesting period ahead.The performance condition is thus creating net new value above the value on the date of issue.The human resources and remuneration committee conducts annual reviews (at different stages in the year) of share awards. In addition, if a particular group company employs people during the year, the human resources and remuneration committee may also decide to make awards to those individuals at the time. No awards of shares/appreciation rights are made during a closed period for trading, and backdating of awards is prohibited.There is no repricing and automatic regranting of underwater shares/appreciation rights. Guidelines for making awards have been set.

There is no automatic entitlement to bonuses or early vesting of share-based incentives, should an executive leave the employ of the company. There is a maximum number of shares/appreciation rights that may be awarded in aggregate and to any individual for each share-based incentive scheme.

Service contracts

Executives’ contracts generally are subject to local terms and conditions of employment.Top executive and non-executive directors’ contracts do not contain golden parachute clauses. None is linked to any restraint payment.

Non-executive directors are subject to regulations on appointment and rotation in terms of the company’s memorandum of incorporation and the Companies Act.

Share-based incentive plans

The group operates a number of share-based incentive schemes. Full details appear in the annual financial statements, available at is no dilution as these are share appreciation rights.There is a maximum number of shares/appreciation rights that can be allocated in aggregate and to any individual.

Executive directors’contracts

No executive director has a notice period of more than one year. No executive director’s service contract includes predetermined compensation as a result of termination exceeding one year’s salary and benefits.The executive directors have indefinite employee contracts.

Non-executive directors’ terms of appointment

Appointments to the board

The board has adopted a policy on procedures for the appointment and orientation of directors. The nomination committee periodically assesses the skills represented on the board by non-executive directors and determines whether these skills meet the company’s needs. Annual self- evaluations conducted by the board and its committees assist in this regard. Directors are invited to give their input in identifying potential candidates.The members of the nomination committee, who are all independent, propose suitable candidates for consideration by the board. A ‘fit and proper’ evaluation is performed for each candidate identified.

Retirement and re-election of directors

All non-executive directors are subject to retirement and re-election by shareholders every three years. In addition, all non-executive directors are subject to election by shareholders at the first suitable opportunity in the case of an interim appointment.The names of non-executive directors submitted for election or re-election are accompanied by brief biographical details to enable shareholders to make an informed decision on their election.The reappointment of non-executive directors is not automatic.

Directors’ remuneration

      31 March
  Notes   2013
Non-executive directors            
Fees for services as directors     2 871   3 456  
Fees for services as directors of subsidiary companies     1 960   615  
      4 831   4 071  
Non-executive directors’fees for services as directors            
Directors’ fees     2 070   2 460  
Committee and trustee fees 1 & 2   801   996  
      2 871   3 456  
1. Committee fees include fees for attending audit committee, risk committee, human resources and remuneration committee, nomination committee, safety, health and environment committee, and executive committee meetings of the board.
2. Trustee fees are fees for attending various trustee meetings of the company’s retirement fund.

The remuneration of executive directors and key management totalled R55m (2013: R51m), comprising short-term employee benefits of R44m (2013: R34m), post-retirement benefits of R3m (2013: R2m) and share-based payments of R8m (2013: R16m). No exit benefits were paid (2013: R0m).