The importance of getting an executive remuneration policy right has once again been highlighted with the recent vote against the CEO and executive remuneration policy of South African food retailer Shoprite.
 
Investors voted against Shoprite’s policy arguing that the structure of the CEO’s package is mainly based on fixed remuneration and that there was insufficient provision for performance. Shoprite CEO Whitey Basson is paid just over R50m in salary and benefits. However, the fixed part of the package amounts to around R49m.
 
Dr Mark Bussin, Exco member of the South African Reward Association (SARA) says executive pay is more complex than meets the eye. “A strategic take requires research that looks beyond how much executives earn.”
 
This contrast of attraction, motivation and retention of good executives versus tough business control and media spotlights, place remuneration decision-makers in a difficult position.
 
“Generally, executive pay in South Africa is linked to performance and our governance is on par with international standards,” says Dr Bussin. “The international trend of linking more of executive pay to performance is a good principle. Our executive bonus percentages are not out of line with international standards.”
 
According to Dr Bussin, there are certain guidelines for setting CEO and executive pay.
The most common factors to consider when devising a policy include the size of the organisation, the company’s performance, specific factors relating to the executives such as age, experience and career path, the structure of the organisation and job complexity.
 
He adds that the remuneration committee must above all be able to defend their policy; there must be a direct link between the pay and the value that is delivered.
 
One way of assessing a policy is to compare it to the market norm.
 
Dr Bussin says “impeccable governance” is mandatory in the creation of a remuneration policy.  “The board’s remuneration charter should acknowledge responsibility for setting the framework and reviewing the policy.”
 
This requires all committee members to be aware of local and international trends relating to CEO and executive remuneration. It also requires constant engagement and a clear understanding of the company’s needs and future goals. 

ENDS
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MEDIA CONTACT: Cathlen Fourie, 012 644 2833, [email protected], www.atthatpoint.co.za  

For more information on SARA please visit:
Website: www.sara.co.za  
Twitter: @SA_reward
LinkedIn: South African Reward Association
Facebook: SARA – South African Reward Association

While unscrupulous remuneration activities continue to make headlines, companies that use a Total Reward strategy to guide and inform remuneration decisions and practices will soon be awarded top honours by the South African Reward Association (SARA).

“Total Reward includes everything valuable to an employee in relation to his/her employment, including salary, benefits and their experience of their workplace,” says Peet Kruger, executive committee member of SARA, a professional body that promotes and develops the reward profession and practices in South Africa.
“Reward professionals ensure that an employer does everything it can to attract, inspire and retain the best possible workforce, while still increasing profits year on year,” says Kruger. “The annual Reward Awards aim to recognise thought leaders that make a noticeable impact to business through reward strategies and practices that deliver business results and support the objectives or the organisation.”

Entries are invited annually and judged independently by various experts in the reward industry, using criteria relevant to each award.

2014 winners included reward specialists from Woolworths, the Clicks Group, Alexander Forbes, and Nedbank.

The winners of the 2015 awards will be announced on 7 November 2015 in Midrand at the SARA Reward Awards Banquet, sponsored by 21st Century, Remuneration Consultants, and Synntech People Solutions.
The three award categories recognise reward professionals, teams and organisations that have lead the way in promoting and developing the reward profession.

Remuneration Report of the Year Award
Nominees for the 2015 Remuneration Report of the Year include Aveng (Africa) Pty Ltd, Goldfields, Group Five, Impala Platinum Ltd, Liberty Holdings Ltd and Standard Bank.

This award recognises organisations that demonstrate reporting and disclosure of the company’s remuneration philosophy and its application as stipulated by legislative requirements and corporate governance principles.

The judging panel will also consider demonstrated commitments to best practice, and how the company’s approach to remuneration supports the business strategy and aligns the interests of its stakeholders.

Reward Project of the Year Award
Nominees for the 2015 Reward Project of the Year include ArcelorMittal South Africa, Aveng (Africa) Pty Ltd, BP South Africa, the Clicks Group, MTN Group Management Services, PPS Insurance, PwC, and Siemens.

This award recognises an individual or team for the development and implementation of a reward project that uses reward practices and principles in a manner that contributes significantly towards the achievement of the organisation’s objectives or success.

President’s Award
This award recognises an individual that has shaped or significantly contributed to the ongoing development of the reward profession, or has been responsible for the design of complex reward interventions or programmes that have set the standard for best practice in South Africa or internationally.

For more detailed information on the annual SARA Reward Awards please visit www.sara.co.za

To request media attendance to or photos from the awards event, please contact [email protected]

ENDS
​
MEDIA CONTACT: Cathlen Fourie, 012 644 2833, [email protected], www.atthatpoint.co.za  

For more information on SARA please visit:
Website: www.sara.co.za  
Twitter: @SA_reward
LinkedIn: South African Reward Association
Facebook: SARA – South African Reward Association