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Summarised remuneration report
This is a summarised version of the Remuneration Committee's Remuneration Report of the Annual Financial Report 2015.
2015 REMUNERATION POLICY
The key principles of Sibanye's remuneration policy are to:
- support the execution of the Group's business strategy;
- provide competitive rewards to attract, motivate and retain highly skilled executives and staff;
- motivate and reinforce individual, team and business performance; and
- ensure Sibanye's remuneration arrangements are reasonably equitable and facilitate the deployment of people across the Group's operations.
The reward strategy is also underpinned by sound remuneration management and governance principles which are promoted across Sibanye in order to ensure the consistent application of the strategy and its policies. The Group's reward strategy includes the following elements:
- guaranteed remuneration;
- benefits;
- cash bonus and bonus shares (short-term incentives); and
- performance shares (long-term incentives).
REMUNERATION MIX
Sibanye's remuneration model and practices are aimed at attracting and retaining motivated, high-calibre employees and aligning their interests with the shareholders. Such alignment is achieved through an appropriate mix of guaranteed and performance-based remuneration (variable pay), which provides for differentiation between high, average and low performers. The mix of guaranteed pay and variable pay differs according to the level of the employee within the Group. Typically, more senior employees’ remuneration will consist of a higher portion of variable pay as a percentage of their total remuneration.
The following remuneration mix for the period under review was approved by the Remuneration Committee.
| Role | Total | Guaranteed pay | Cash bonus | Bonus shares | Performance shares |
|---|---|---|---|---|---|
| CEO | 100% | 36% | 24% | 16% | 24% |
| CFO | 100% | 39% | 23% | 15% | 23% |
| SVP | 100% | 43% | 21.5% | 14% | 21.5% |
GUARANTEED REMUNERATION
Sibanye endeavours to reward its people fairly and consistently according to their role and individual contribution to the Group. To achieve reasonable external parity and a competitive total remuneration position, Sibanye surveys the relevant data on comparable pay practices regularly. The Committee also pays attention to the matter of internal parity of pay differentials across executives and role types within the Company.
The benchmark for guaranteed remuneration is the market median level per category within the relevant gold mining companies and other comparable mining companies together with consideration of internal parity comparisons.
Guaranteed remuneration levels are reviewed annually by the Remuneration Committee, taking into account the Group's performance, change in responsibility, levels of remuneration increases based on market trends and inflation. The Remuneration Committee also considers the impact of any guaranteed remuneration increase on the total remuneration package.
ANNUAL BONUS
Executive directors are able to earn bonuses of 60% (for the CFO) and 65% (for the CEO) of their guaranteed pay for on-target performance, which is determined by a combination of Group and individual performance outcomes. The annual bonus could increase above 60% and 65% if stretch targets are achieved whereby the maximum variable pay potential is capped at two times the on-target bonus percentage.
The targets for annual bonus are set by the Remuneration Committee. In the case of the CEO and CFO, 90% of the annual bonus is based on Group objectives and the remaining 10% on individual objectives.
In 2015 annual bonuses were based on targets approved in advance by the Remuneration Committee, comprising a combination of Group and Operational objectives taking account of the Group's business plans.
The CEO and CFO were also assessed on individual objectives. These are set every year for each executive director based on key performance areas and are approved at the beginning of each year by the Remuneration Committee. The individual objectives are typically centred on three themes: Operational Excellence, Growing Sibanye and Securing Sibanye's Future.
For the year ended 31 December 2015, the Group performance measures for executive directors and senior executives were:
| Corporate performance 2015 | Weight % | Actual | Target | Achieved % | |
|---|---|---|---|---|---|
| Safety | Reduce FIFR | 10 | 0.065 | 0.090 | 200% |
| Reduce LTIFR | 5 | 6.74 | 5.27 | 0% | |
| Reduce SIFR | 5 | 4.68 | 3.15 | 0% | |
| Volume | Primary on-reef development (m) | 10 | 19,543 | 19,222 | 133% |
| Primary off-reef development (m) | 10 | 48,581 | 47,246 | 157% | |
| Cost | Cost of ore milled – R/ton (underground) | 25 | 1,740 | 1,771 | 135% |
| Quality | Grade and quality – gold produced (kg)1 | 35 | 48,638 | 52,000 | 57% |
| 100 | 103% | ||||
- 1 The organisational performance is based on allowance for 710kg gold production at Kloof that was lost due to three fires that are considered to be events outside direct management control as well as 152kg of gold that was lost at our surface operations across Beatrix, Driefontein and Kloof due to the need to reduce electricity consumption in response to load curtailment requirements imposed by Eskom.
In turn, the CEO develops specific individual objectives with his own direct reports at the beginning of each year. These objectives are then reviewed with the Remuneration Committee and form the basis upon which the other executives’ performance, together with the Operational performance outcomes, will be reviewed at the end of the year.
Based on the bonuses determined for each executive for the year ended 31 December 2015, the annual bonus as a percentage of guaranteed pay paid to executive directors and prescribed officers of Sibanye in February 2016 was:
| Name | 2015 Annual incentive as percentage of guaranteed pay |
|---|---|
| Executive directors | |
| Neal Froneman | 70.8% |
| Charl Keyter | 64.1% |
| Prescribed officers | |
| Shadwick Bessit | 52.4% |
| Hartley Dikgale | 52.4% |
| Cain Farrel | 41.9% |
| Nash Lutchman | 52.4% |
| Dawie Mostert | 53.2% |
| Adam Mutshinya | 52.2% |
| Thabisile Phumo1 | 52.7% |
| Dick Plaistowe2 | 51.2% |
| Wayne Robinson | 52.7% |
| Richard Stewart | 53.7% |
| Peter Turner | 52.7% |
| Robert van Niekerk | 52.9% |
| James Wellsted | 52.7% |
- 1 Appointed as a prescribed officer on 1 June 2015
- 2 Retired as a prescribed officer on 30 September 2015
SCHEDULE OF FEES AND REMUNERATION
The table below sets out the remuneration of executives and non-executive directors, and prescribed officers.
NON-EXECUTIVE DIRECTORS’ FEES, EXECUTIVE DIRECTORS AND PRESCRIBED OFFICERS’ REMUNERATION
The directors and prescribed officers of Sibanye were paid the following remuneration during the year ended 31 December 2015:
| Directors’ fees (R’000) | Committee fees (R’000) | Salary (R’000) | Annual bonus accrued for the period ended 31 December 2015 paid in 2016 (R’000) | Shares proceeds and dividends on Bonus Shares (R’000) | Pension scheme total contributions (R’000) | Expense allowance (R’000) | For the period ended 31 December 2015 (R’000) | For the period ended 31 December 2014 (R’000) | |
|---|---|---|---|---|---|---|---|---|---|
| Executive directors | |||||||||
| Neal Froneman | – | – | 7,136 | 5,660 | 6,165 | 793 | 132 | 19,886 | 12,868 |
| Charl Keyter | – | – | 3,861 | 2,896 | 5,736 | 549 | 77 | 13,119 | 7,427 |
| Prescribed officers | |||||||||
| Shadwick Bessit | – | – | 3,278 | 2,012 | 5,122 | 571 | – | 10,983 | 6,029 |
| Hartley Dikgale | – | – | 2,569 | 1,409 | 1,223 | 167 | – | 5,368 | 3,926 |
| Cain Farrel | – | – | 1,815 | 938 | 3,078 | 404 | – | 6,235 | 3,880 |
| Nash Lutchman | – | – | 2,016 | 1,184 | 2,829 | 280 | – | 6,309 | 3,237 |
| Dawie Mostert | – | – | 2,501 | 1,573 | 1,461 | 439 | – | 5,974 | 4,170 |
| Adam Mutshinya | – | – | 2,271 | 1,398 | 878 | 399 | – | 4,946 | 4,570 |
| Thabisile Phumo1 | – | – | 1,306 | 749 | 133 | 124 | – | 2,312 | – |
| Dick Plaistowe2 | – | – | 3,016 | 1,123 | 876 | – | – | 5,015 | 2,842 |
| Wayne Robinson | – | – | 3,584 | 1,962 | 357 | 277 | – | 6,180 | 3,636 |
| Marius Saaiman3 | – | – | 824 | – | – | 70 | – | 894 | 4,130 |
| Richard Stewart | – | – | 2,876 | 1,671 | 296 | 309 | – | 5,152 | 3,003 |
| Peter Turner | – | – | 5,231 | 3,212 | 17,334 | 908 | – | 26,685 | 13,541 |
| Robert van Niekerk | – | – | 3,633 | 2,119 | 9,585 | 397 | – | 15,734 | 9,126 |
| James Wellsted | – | – | 2,473 | 1,541 | 412 | 435 | – | 4,861 | 4,282 |
| Non-executive directors | |||||||||
| Robert Chan | 816 | 231 | – | – | – | – | – | 1,047 | 553 |
| Chris Chadwick | 816 | 231 | – | – | – | – | – | 1,047 | 633 |
| Timothy Cumming | 816 | 413 | – | – | – | – | 49 | 1,278 | 1,190 |
| Barry Davison | 816 | 528 | – | – | – | – | 43 | 1,387 | 1,255 |
| Richard Menell | 816 | 681 | – | – | – | – | 38 | 1,535 | 1,351 |
| Sello Moloko | 1,544 | – | – | – | – | – | – | 1,544 | 1,539 |
| Nkosemntu Nika | 816 | 384 | – | – | – | – | – | 1,200 | 1,115 |
| Keith Rayner | 816 | 604 | – | – | – | – | – | 1,420 | 1,253 |
| Zola Skweyiya4 | 330 | 93 | – | – | – | – | – | 423 | 931 |
| Susan van der Merwe | 816 | 269 | – | – | – | – | – | 1,085 | 1,054 |
| Jerry Vilakazi | 816 | 297 | – | – | – | – | – | 1,113 | 1,082 |
| Jiyu Yuan5 | 529 | 75 | – | – | – | – | – | 604 | – |
| Total | 9,747 | 3,806 | 48,390 | 29,447 | 55,485 | 6,122 | 339 | 153,336 | 98,623 |
- 1 Appointed as a prescribed officer on 1 June 2015
- 2 Retired on 30 September 2015
- 3 Resigned on 31 March 2015
- 4 Resigned as a non-executive director on 21 May 2015
- 5 Appointed as a non-executive director on 12 May 2015