Remuneration Report 2019

Remuneration report continued Package design The below scenario graphs provide an overview of potential pay outcomes at below expected performance, at expected performance and at stretch performance levels. Chief executive of cer (R’000) 28 399 26 770 16 731 16 731 15 620 16 731 ■ TGP 0 10 000 20 000 30 000 40 000 50 000 60 000 70 000 ■ STI ■ LTI 16 731 Above expected performance** At expected performance* Below expected performance Chief nancial of cer (R’000) 11 162 10 938 6 836 6 836 6 139 6 836 ■ TGP 0 5 000 10 000 15 000 20 000 25 000 30 000 ■ STI ■ LTI 6 836 Above expected performance** At expected performance* Below expected performance * LTI includes indicative expected value on grant date. ** LTI includes indicative expected value on grant date assuming full vesting. Further details on LTI plans Bidcorp CSP Upon the listing and unbundling of Bidcorp, shareholders approved the CSP. The CSP was originally only implemented for executive directors. However, where senior management perform some group-wide functions, they are considered for CSP awards. Under the CSP, participants are awarded a right to future delivery of equity (ie a conditional right to receive shares). Vesting of shares is subject to the achievement of performance conditions. Performance conditions, each with different weightings, have been imposed. The performance period is three years, coinciding with the Bidcorp financial year. After the three-year performance period, 75% of the shares vest while the remaining 25% vest after four years. Details of the 2019 award, the performance period and the performance conditions are shown in part 3 of this report. In 2020, the CSP scheme will be extended to senior operational management (part of the allocation subject to performance conditions and part of the allocation not) as a substitute for allocations under the SAR plan. Bidcorp SAR Plan Upon the listing and unbundling of Bidcorp, shareholders approved a SAR plan for senior management, excluding executive directors. SARs vest between three and five years after award and lapse after seven years. Bidcorp’s LTI plans and dilution In terms of the Bidcorp LTI plan rules, an overall limit of approximately 5% of the issued shares of the company has been imposed when shares are allocated and issued in terms of the plans, incorporating both SARs and CSPs. If shares are purchased in the open market for settlement of allocations in terms of the SAR and CSP, the overall limit of 5% will not be impacted. New malus and clawback policy In line with established global practice and emerging local trends Bidcorp has adopted malus and clawback provisions with respect to variable pay awards, including STI and LTI awards. In terms of this policy, awards which have not yet vested may be forfeited (malus) and the value of awards which have already vested and have been settled may have to be refunded (clawback). These provisions will be effected in the case of material misstatement of financial results and other performance measures on which the settlement of the affected awards was based, discovery of material regulatory breaches, instances of misconduct or behaviour which brings the company into disrepute. These provisions will apply prospectively to the 2020 STI and LTI awards. The clawback provisions apply for a period of three years following the settlement of the applicable award. Non-executive directors Terms of service Non-executive directors are appointed by the shareholders at the AGM. Interim board appointments are permitted between AGMs. Appointments are made in accordance with group policy. Interim appointees retire at the next AGM, when they may make themselves available for re-election. As appropriate, the board, through the nominations committee, proposes their re-election to shareholders. There is no limit on the number of times a non-executive director may make him or herself available for re-election. 5 / Bid Corporation Limited Remuneration report 2019