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The vesting percentage of the June 2013 allocation for executive
directors and prescribed officers is 90.2% of target.
Award levels
For the CEO, executive director and prescribed officers, the standard
on-target value of FSP awards (as a percentage of GP at target level)
is reflected in the next table. For executive directors and prescribed
officers, the standard awards may be multiplied by 0% to 200% to
set an annual award, based on the performance and potential of
the individual.
Role
2016
On-target
value %
2015
On-target
value %
CEO
1
90%
90%
Executive directors
70%
60%
Prescribed officers
2
50% or 70%
45% or 60%
Notes:
1. Further long-term incentives, in addition to the standard annual award above,
are offered to Mr Shameel Aziz Joosub provided that he meets an annual
co-investment requirement, which are all subject to performance conditions.
The additional incentives offered and associated conditions are:
• An additional award of Vodacom performance shares with an on-target value of
50% of his GP, provided that he invests in Vodacom shares to the value of 50%
of his GP; and
• An additional award of Vodafone performance shares with an on-target value of
50% of his GP, provided that he invests in Vodafone shares to the value of 50%
of his GP. Mr Shameel Aziz Joosub may only take advantage of the additional
Vodafone share award if he has met the full Vodacom co-investment
requirement. His investment in both Vodacom and Vodafone shares must be on
an ever-increasing basis to qualify for the additional awards.
2. The Remuneration Committee reviewed and approved an increase in the on-target
allocation percentage for prescribed officers.
Vesting of awards
For executive directors and prescribed officers, the vesting of awards
with performance conditions is 20% at threshold, 50% at target, and
up to 100% at maximum performance.
Vodafone Performance Share Plan
The CEO and the prescribed officers participate in the Vodafone
Performance Share Plan. This plan has two performance conditions:
adjusted free cash flow and relative total shareholder return (TSR)
against a peer group median. Vesting is based on meeting these
conditions after a three-year performance period.
This is to provide alignment and synergy with the Group’s parent
company Vodafone Group Plc, which the RemCo believes is also in
the interests of the Vodacom Group’s shareholders. The portion of
total variable pay (STI and LTI) related to Vodafone performance is
not excessive for the prescribed officers and the Group’s own
performance remains the critical driver of variable pay.
Shareholding guidelines
The Board wishes to encourage individual shareholding in the
Company by executives, as a tangible demonstration of their
commitment to the Group and to align with shareholder interests.
Executives are thus required to hold the following minimum
personal shareholdings:
Role
Minimum holding
Executive director
100% x GP
Prescribed officers
50% x GP
The CEO is required to make substantial investments in company
shares to qualify for his co-investment share awards, as described
previously, and as a result he is not covered by these shareholding
guidelines.
As an incentive to exceed the minimum requirements, additional
awards of FSP performance shares will be made to executives who
exceed the minimum requirements over a three-year vesting cycle,
being six years. The participants will be granted a performance share
for every three additional shares held. This award will be capped so
that holdings of no more than double the minimum requirements
will be recognised. The time period over which the executives are
permitted to build up this shareholding is based on the vesting of
three cycles of the annual awards under the FSP plan.
Executive contracts and policies
Executives have permanent employment contracts with six-month
notice periods, which came into effect in November 2009. Prior to
this, executives had a two-year rolling contract, entitling them to
one year’s guaranteed pay for every four years of service up to a
maximum of 16 years on termination of employment (conditional
benefit). This benefit was subject to a 12-month notice period.
The benefit that accrued up to 26 November 2009 was based on
the number of years of service payable on termination of
employment. Apart frommoney market interest, no further
termination benefits accrued after this date.
Executives who have a conditional benefit in terms of their previous
service contract had the option to convert a portion or all of their
benefit to shares for the purpose of meeting the shareholding
guidelines. These shares (‘restricted shares’) are subject to the same
conditions as those of the underlying conditional benefit. The
majority of our executives have converted their benefits.
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