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The RemCo reviews the total pay mix of executives every year and
decides on the proportion of total remuneration paid as part of the
guaranteed package, or as short- and long-term incentives. Each
element is linked to creating shareholder value and the strategic
progress made in the year. The RemCo reviews targets and the
on-target values for each element every year to ensure that it
remains relevant, drives the right behaviours, and enhances overall
shareholder value.
The pay mix for the CEO and prescribed officers is shown below:
34%
GP
CEO
32%
LTI
34%
STI
46%
GP
Prescribed officers
27%
LTI
27%
STI
Reward benchmarking
Fair and competitive reward is vital to being an employer of choice.
Our executive remuneration is benchmarked against data provided
by national remuneration surveys, as well as information disclosed
in the directors’ remuneration reports. Our RemCo reviews peer
group data from the JSE telecommunications, ICT sectors and other
listed companies, using a weighted combination of market
capitalisation, turnover, capital assets and number of employees,
when setting the total remuneration and the guaranteed packages
of executives.
Drawing comparisons with these sectors mitigates the risk of losing
skilled executives to competitors and is useful in setting the Group’s
remuneration strategy.
For benchmarking below Executive levels, Vodacom uses market
information from PwC Remchannel for our South African market
and Mercer Global Remuneration Solutions for our non-South
African operating markets.
Guaranteed package (GP)
Vodacom applies a total cost to company philosophy referred to as
the guaranteed package. All employees, including executive
directors, receive a GP based on their roles, individual performance
and Group performance. Within the context of this GP, Vodacom
offers a selection of benefits that are both best practice and
compliant with legislative practices. All contributions to retirement,
risk and insured benefits and healthcare benefits are included in
the GP.
We do our annual pay review on the 1st of July each year taking
into account the changes in the economic environment and
movements in the external market. Increases in the GP for
employees are based on a review of market information,
consideration of individual performance and pay levels, and
the business priorities of the Group.
All permanent employees, including executive directors and
prescribed officers, are required to join the Vodacom Group Pension
Fund, a defined contribution pension fund. Executives also
participate in the Vodacom Group Executive Provident Fund, which
is also a defined contribution fund. Employees have the option to
choose their level of contribution to the pension fund, and also
have the option to choose where they would like their money to be
invested based on their own individual risk profile. Contributions are
based on pensionable salary, which is defined as 70% of GP.
Besides the retirement fund contributions, lump sum contributions
may also be made as part of the short-term incentive payment.
The normal retirement age for executive directors and other
executives is 60 years. For all other employees it is 65 years.
Employees can choose to participate in a nominated medical aid
scheme. Although membership of a medical aid scheme is
voluntary, we always urge employees to carefully consider the risk
of any major medical expense. The nominated schemes available to
choose from were chosen for cost effectiveness and to address the
needs of the diverse Vodacom workforce. Vodacom does not offer
post-retirement medical benefits and has no such liabilities.
In the unfortunate event of an employee’s death, we will make sure
that their dependants and beneficiaries are well taken care of. The
employee’s beneficiaries will receive a lump sum amount of three
times the employee’s annual pensionable salary (core cover). If the
employee had a qualifying spouse and/or qualifying children upon
death, a spouse’s pension of 40% of monthly pensionable salary
and a child’s pension of 10% of monthly pensionable salary
becomes payable. The scheme also covers the costs of children’s
education.
All employees have the option to select additional death cover of
up to seven times their annual pensionable salary, inclusive of the
compulsory core cover of three times annual pensionable salary.
These additional contributions are calculated as a percentage of
pensionable salary.
Remuneration report
continued
Vodacom Group Limited
Integrated report for the year ended 31 March 2016
68