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Our business
Our performance
Our governance
Administration
Independent external advisors:
The RemCo contracted the services of Vasdex Associates
(Pty) Limited for independent external advice. The committee is
satisfied with their independence and objectivity.
Shareholder voting
As required by King IV and the JSE Listings Requirements,
Vodacom will put a dual vote to shareholders regarding: a)
approval of the remuneration policy; and b) implementation of
the policy. Should either vote receive 25% or more votes against,
Vodacom will take the following steps:
g
g
Issue a SENS announcement regarding the outcome of the
voting results;
g
g
Invite shareholders to engage with Vodacom regarding their
dissatisfaction with either of the votes;
g
g
Schedule collective and/or individual engagements with
concerned shareholders to record their concerns and
objections firsthand;
g
g
Assimilate all responses and schedule RemCo sessions to
analyse concerns and issues raised with the aim of formulating
changes to policy and implementation where required; and
g
g
Develop a formal response to shareholders, which articulates
the concerns raised, the details of where changes will be made
to address concerns raised, and provides detailed responses for
areas where Vodacom, despite the shareholder feedback,
believes their current policy and/or implementation is
adequate.
Voting at the July 2017 annual general
meeting (AGM)
Results of shareholder voting at the most recent AGMs are
indicated below.
2017
2016
g
g
Approval of the remuneration
policy
94.20%
99.22%
g
g
Implementation of the
remuneration policy
94.20%
n/a
g
g
Non-executive directors’ fees
99.76%
99.77%
RemCo has taken note of the reduction in the percentage in favour of the remuneration policy from 99.22% in 2016 to 94.20% in 2017.
On analysis, the following were determined to be the key issues for shareholders.
Issue
RemCo response
1.
The Remuneration report provided no
explanation for the significant
guaranteed package increases to the
CEO and CFO of 25% and 8%
respectively
Shareholders are advised that at the time (towards the latter half of 2016 and early
calendar 2017), it was public knowledge that a major competitor had initiated a
search for a CEO and was also actively recruiting for other senior roles.
The Board has a duty to all shareholders to ensure that Vodacom has adequate
performance, recognition and retention mechanisms in place for key executives. To
this end the RemCo proactively ensured that, after benchmarking and competitor
reviews, the CEO and CFO were remunerated appropriately given market and
performance considerations.
2.
Retention shares are being granted to
prescribed officers
Senior leadership team (SLT) members (including previously defined prescribed
officers) continue to receive a proportion of LTIP awards in the form of retention
shares. The Board and RemCo believe that it is a necessary policy in order to
provide a degree of retention for the key talent of Vodacom who participate in the
LTIP scheme. It should further be noted that the value of these retention shares is
dependent on movements in share price and cash flow generation and, hence, they
remain 100% aligned with shareholders’ interests. Only 33% of the shares allocated
are retention shares. The remaining 67% is linked to performance conditions.
3.
Specific targets are not disclosed for the
STIP and LTIP
A prior disclosure of targets for STIP and LTIP would amount to forecasting which is
expressly prohibited by the JSE. The performance ranges around the business plan
for both STIP and LTIP are disclosed in the policy section. This, together, with the AFS
disclosure and disclosure of actual percentage achievement in the implementation
section provides shareholders with all relevant information.
AGM vote:
As required by the Companies Act and King IV, the following resolutions will be tabled for shareholder voting at the AGM in July 2018,
details of which can be found in the notice of AGM:
g
g
Binding vote on non-executive directors’ fees;
g
g
Advisory vote on the remuneration policy; and
g
g
Advisory vote on the implementation report.