Merafe Resources Integrated Annual Report 2018

MERAFE RESOURCES INTEGRATED ANNUAL REPORT 2018 54 TRANSPARENCY AND ACCOUNTABILITY Remuneration report (continued) Performance measure II: Growth in Headline Earnings per share (HEPS) Assuming that the performance targets below are set by the Board as illustrated in the table below, vesting of the performance based share grants will be in accordance with the following policy: • 50% of performance shares allocated will be subject to performance against the growth in HEPS measure; • If performance meets or exceeds target, i.e. CPI + 2% over the performance period, 100% of shares will vest; • If performance is at threshold, i.e. CPI + 1% over the performance period, 50% of shares subject to this measure will vest; • For performance below threshold, 0% of shares subject to this measure, will vest; and • Linear vesting will take place between different performance milestones. Vesting schedule for Growth in HEPS measure Vesting schedule over three years – Growth in HEPS HEPS target Vesting quantity % of allocation* Proposed On target CPI + 2% 100% Threshold CPI + 1% 50% Below threshold 0% * Vesting over three years in equal portion. LTI offer policy The following principles will govern the LTI offer policy: • Share options will only be given at the discretion of the Board as and when circumstances dictate and only to executive management that have direct line of sight in terms of Company performance; • Full value shares, with performance conditions, will be granted to all employees on an annual basis subject to ongoing satisfactory individual performance, the expected value of which will be in accordance with the Company’s reward strategy – pay mix; • Full value shares may be offered to new appointees as an attraction measure, the value of which will be determined and approved by the Committee, and will be subject to a minimum of three years vesting period; • Share grants will be in favour of performance based shares, with all shares granted subject to performance measures over a three year period; • Share grants will be offered to employees with only performance and no retention shares; • The value of the share grant will be calculated as a percentage of the current TCtC guaranteed package; • No offer shall be made which together with any other scheme shares would exceed 5% of total issued share capital of the Company; • The maximum aggregate number of shares granted or options allocated to a single participant, shall be limited to 1% of the total issued share capital of the Company; • Prior to vesting, no participant will qualify to receive any dividends declared; • The Company will communicate to participants, at least on an annual basis, in terms of shares granted, vesting and/or any changes in rules or conditions of participation; and • All share grants and options will be disclosed over its lifetime in the annual Remuneration Report. Contracts of employment Senior and executive management are subject to the Company’s standard terms and conditions of employment where notice periods are between three and six months. In line with the recommendations set out in the King reports, Company policy prevents any senior or executive manager from being compensated for loss of office. None of the senior or executive management have extended employment contracts or special termination benefits or balloon payments. In the event of a change of control of the Company (as defined in the Companies Act) where the Company no longer requires an executive to fulfil their specific role post the change of control, the Company shall pay to the executive 12 months remuneration on the last day of the notice period and after completion of handover of duties. Retention measures The Committee reserves the right to apply retention measures should circumstances indicate. Retention measures may include cash or equity awards and will be appropriately disclosed on an annual basis. Clawbacks Any remuneration previously paid to executive directors, that is subsequently found to have been as a result of criminal or otherwise illegal activities, must be repaid to the Company. In the event of restatement of the Company’s results (other than a restatement caused by a change in accounting policy, standards or interpretation) which results in lower performance-based remuneration had it been calculated on the restated results, the Committee shall review such performance-based remuneration, determine the amount to be recovered from the executive and take steps to recover the amount. Non-executive directors' fees The remuneration of non-executive directors is provided in the context of good governance, and is primarily based upon a methodology which takes into account expertise, contribution by the director and attendance. Standard duties of non-executive directors include preparation for and attendance at Board meetings, AGMs and results presentations. If required, the directors may be requested to perform work outside of their standard duties and for this they will be remunerated based upon the time spent and their level of expertise. Independent benchmark advice is sought as to levels of remuneration for non-executive directors and the policy is that non-executive directors will be remunerated at the median to lower quartile of listed companies of similar size, in order to ensure that appropriately qualified and experienced directors are appointed. Non-executive directors’ fees will be tabled for approval by the shareholders of the Company on an annual basis. The fees paid to different roles such as chairman may vary from the fees paid to other non-executive directors. The remuneration of non-executive directors will be split between 40% in relation to fees for attendance at meetings and 60% in relation to fees for retention. Attendance at meetings will include scheduled Board meetings and special Board meetings. Retention fees will include inter alia attendance at site visits, round robin resolutions/decisions and strategy sessions. Non-executive directors do not participate in any share-based incentive scheme or any other incentive scheme that the Company may implement to avoid any potential conflict of interest. Review This policy was approved by the Company in March 2019 and will be reviewed annually against current legislation and practice for approval by shareholders during the Annual General Meeting. Implementation report for 2018 The implementation of the Policy approved by shareholders at the Annual General Meeting in May 2018 is set out below: Executive pay 2018 R'000 2017 R'000 ZJ Matlala Salary 4 587 4 310 Bonus 3 910 4 422 Fringe benefits and leave pay 162 133 Provident contributions 350 350 Share grants vested 3 366* 4 574 Share options vested – 1 911 Total 12 375 15 700