| The Remuneration Committee presents its Remuneration Report, which was approved by the Board of Directors on 11 November 2008. | ||||||||||||||||||
| INTRODUCTION | ||||||||||||||||||
| This report has been prepared in accordance with the Directors’ Remuneration Report Regulations 2002 (the ‘Regulations’). The report also meets the relevant requirements of the Listing Rules of the Financial Services Authority and describes how the Board applies the Principles of Good Governance relating to directors’ remuneration. As required by the Regulations, a resolution to approve the report will be proposed at the Annual General Meeting of the Company, at which the financial statements will be approved. The Regulations require the auditors to report to the Company’s members on certain parts of the Directors’ Remuneration Report and to state whether in their opinion those parts of the report have been properly prepared in accordance with the Companies Act 1985 (as amended by the Regulations). The report has therefore been divided into separate sections for audited and unaudited information. | ||||||||||||||||||
| UNAUDITED INFORMATION | ||||||||||||||||||
| The Remuneration Committee | ||||||||||||||||||
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The Remuneration Committee members for the period under review were as follows: Wendy Lucas-Bull (Chairperson) The members of the Remuneration Committee are considered by the Company to be independent non-executives, with the exception of Dillie Malherbe. The explanation for Dillie Malherbe’s appointment to the Remuneration Committee is set out in the Corporate Governance Report. All members of the Remuneration Committee are free from conflicts of interest in considering matters relating to remuneration of executives. The Remuneration Committee met three times during the period under review. A table showing attendance at committee meetings is available. A copy of the full terms of reference for the Remuneration Committee is available on the Company’s website www.dimensiondata.com No director or manager is involved in any decisions relating to his or her own remuneration. The Remuneration Committee has internal and external resources available to it to assist in the performance of its duties. The Chairman, the Chief Executive Officer and the Group Executive Human Resources provide information on current remuneration and performance of directors and senior management, and are available to the Remuneration Committee to answer any questions that may arise. The Chief Financial Officer assists the Remuneration Committee in ensuring the affordability of the long term incentive schemes. The Company Secretary provides assistance and advice to the Remuneration Committee with respect to governance, the operation of the long term incentive schemes and regulatory compliance. Towers Perrin have been appointed by the Committee to provide benchmarking information in relation to base salaries of the executive directors. PricewaterhouseCoopers have been appointed by the Committee to provide advice on the operation of the long term incentive schemes. |
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| Policy on executive and non-executive directors’ remuneration | ||||||||||||||||||
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The Group’s business depends on the attraction, retention and motivation of high calibre executives and staff. With a presence on five different continents our international scope is much greater than many companies of a similar size, and we compete to attract and retain top staff with large multinational organisations. The Remuneration Committee has considered the following principles in setting remuneration for future financial years:
The policy relating to each component of remuneration for the directors is summarised below: |
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| Base salary | ||||||||||||||||||
| The base salary of the executive directors is subject to annual review and is set with reference to external market data provided by Towers Perrin relating to similar companies based in South Africa, Europe, the UK and the US and taking into account the primary location of the directors concerned. Consideration is given to the size, market sector, business complexity and international reach of the comparator companies. Base salary is set in the third quartile in relation to the comparator companies, ensuring an overall emphasis on performance related remuneration is maintained. | ||||||||||||||||||
| Annual bonus plan | ||||||||||||||||||
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Each of the executive directors participates in an annual bonus scheme. The annual bonus is designed to ensure that directors’ remuneration is aligned with the interests of the Company’s shareholders and other stakeholders. The upper limit for the ontarget annual bonus plan for directors is 150% of base salary. In addition, if there is an overachievement on performance targets the Remuneration Committee may award a further bonus up to an agreed maximum with each bonus above the on-target level being considered on a case by case basis. During the 2008 financial year awards under the annual bonus plan were made to executive directors. For the financial year 2009, performance criteria will include earnings per share and Group and regional operating profit, together with an amount relating to the achievement of personal key performance indicators (KPIs). |
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| Long term incentives | ||||||||||||||||||
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The Group has four long term incentive schemes. Awards are no longer made under the two option schemes, although the executive directors have options outstanding under these schemes. The two current long term incentive schemes are the Share Appreciation Rights Scheme (SARS) and the Long Term Incentive Plan (LTIP). No awards have been made under the SARS in the year ended 30 September 2008. The performance criterion for the 2008 LTIP award was Total Shareholder Return (‘TSR’) over a three year period compared to the TSR of a peer group. Vesting will commence if the TSR ranks at the median TSR of the peer group, when 50% of the LTIP awards may vest. Vesting will progress linearly as the rank of the TSR increases, reaching 100% vesting at the upper quartile ranking. Details of the peer group for the LTIP can be found on the corporate website www.dimensiondata.com These performance conditions were chosen to align employee benefits with Group performance and the interests of shareholders. During the period LTIP awards were made to executive directors. |
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| Pensions and other benefits | ||||||||||||||||||
| The executive directors each receive life insurance, disability insurance and medical cover benefits which reflect the practice in the countries in which they are primarily resident. Other benefits include payment of an annual club subscription, vehicle expenses and income tax consultancy services. The cost to the Group is shown. Contributions are also made for the executive directors to the Group’s provident fund, which is a defined contribution pension scheme. | ||||||||||||||||||
| Service contracts | ||||||||||||||||||
| The executive directors have identical service contracts. These contracts are rolling and contain a three month notice period. On termination, except by reason of cause, illness, death, injury or retirement, the executive director will be entitled to payments equal to 12 months’ base salary plus a pro rata portion of bonus (if all conditions applicable to the bonus have been proportionately achieved, as determined by the Remuneration Committee). The amounts will be payable in equal amounts over the 12 months subsequent to termination, subject to the director’s obligation to mitigate such costs by seeking alternative employment and the Company being entitled to deduct, from the amounts payable, all remuneration and fees received pursuant to such alternative employment. | ||||||||||||||||||
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| Each non-executive director has a letter of appointment, of three year duration, and containing a one month notice provision. There are no compensation provisions for early termination of non-executive director appointments. | ||||||||||||||||||
| Non-executive directors’ fees | ||||||||||||||||||
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The remuneration of non-executive directors is a matter for the executive members of the Board. The executive directors determine the remuneration of the nonexecutive directors annually. The fees were reviewed and increased with effect from 1 October 2007. Consideration is given to fees payable to non-executive directors for comparable companies. Additional fees are paid to committee members and chairmen of Board Committees to take account of the additional work involved. Non-executive directors are not eligible to participate in the Company’s long term incentive schemes. |
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| External appointments | ||||||||||||||||||
| Executive directors may accept external appointments, subject to Board approval. |
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