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Remuneration report
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Vodacom Group Limited
Integrated report for the year ended 31 March 2018
Section 2a:
Our remuneration philosophy, policy and framework for
the current year
Our aim is to attract, retain and motivate executives of the highest
calibre, while at the same time aligning their remuneration with
shareholders’ interests and best practice. Our approach to reward
is holistic, balanced across the following elements:
g
g
Guaranteed package (GP);
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g
Variable short-term incentive (STIP);
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g
Variable long-term incentive (LTIP);
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g
Various recognition programmes;
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Individual learning and development opportunities;
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Stimulating work environment; and
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Well-designed and integrated employee wellness programme
Vodacom adheres to a ‘total cost to company’ philosophy, which
we refer to as the guaranteed package (GP). All employees in
South Africa, including executive directors, receive a GP based
on their role in the Company and linked to their individual
performance. Contributions to medical aid, retirement funding
and insured benefits are included in the GP.
The above elements are underpinned and reinforced by our
performance development (PD) and talent management
processes. Our policy is to reward our executives for their
contributions to our strategic, financial and operating
performance. To be a top employer in our industry we need to
attract, develop and retain top talent and intellectual capital, both
locally and internationally.
On an annual basis, we conduct remuneration benchmarking and
award increases in the GP according to the market, individual
performance and potential. Individual performance and potential
assessment is determined through our talent management and
performance development processes. The outcome of these
processes also influences the awarding of short- and long-term
incentives in the future.
Our short-term incentive, in the form of an annual cash bonus, is
linked to achieving financial, strategic and operational objectives
and the employee performance against their objectives set by line
management. The pool available for short-term incentives is
determined by financial performance of the Group against
previously set and agreed targets.
Our long-term incentive, in the form of an annual share allocation,
encourages ownership and loyalty, and supports our objective to
retain valued employees. It is designed to align executive
performance to shareholders’ interests, as a portion of the award is
subject to Group performance conditions. The scheme is a full
ownership scheme; as a result, participants receive dividends from
the award date although the value of the shares can only be
realised after a three-year vesting period, to the extent that the
vesting conditions have been met.
RemCo reviews the total pay mix of executives every year and
decides on the proportion of total remuneration to be paid as GP,
STIP and LTIP, as each of these elements is linked to creating
shareholder value and the strategic progress made in the year.
Vodacom’s reward framework:
Vodacom’s reward framework comprises financial and
non-financial elements, and is applied to all employees,
including executive directors. The Vodacom reward framework
is explained in the picture below:
My non-financial
reward
Employee benefits
Work environment
Learning and development
Recognition
Employee wellness programmes
My remuneration
(Financial reward)
Recognition
Other, e.g. cellphone and data benefits
Guaranteed package (GP)
Short-term incentive (STIP)
Long-term incentive (LTIP)
My reward
at Vodacom