Section A: Report from the Chairman of the Remuneration Committee

I am pleased to present the Massmart Remuneration Report for the year ended December 2016. Within this report information applicable to Massmart’s remuneration philosophy, policy and practice for Executive and non-Executive Directors is detailed. It sets out the actual payments, accruals and awards for the 2016 financial year. The Remuneration Report is aligned with the Remuneration guidelines of the King Code of Governance Principles (King III) and it is compliant with the Companies Act. The report seeks to provide the following:

  • A summary of the Group’s remuneration policy, philosophy and objectives;
  • The Remuneration Committee and its role;
  • Key remuneration decisions taken during the 2016 financial year;
  • Key remuneration priorities for the 2017 financial year;
  • Executive Directors’ contractual arrangements, pay-mix and earnings; and
  • Non-Executive Directors’ contracts and payments.

The Board is actively working towards the integration of King IV recommendations in future remuneration reports.

Massmart Group performance

Although the year under review was challenging, I am pleased to report that 2016 saw a good delivery against the Group’s strategic objectives and our targets for financial performance.

Despite the increasingly volatile environment, Massmart’s total sales for the year ended December 2016 were R91.3 billion, an increase of 7.7% over the prior year (2015: R84.7 billion, 2014: R78.2 billion and 2013: R72.3 billion). Pleasingly, Group operating profit, excluding foreign exchange movements and interest, grew by 14.1% to
R2.6 billion (2015: R2.3 billion, 2014: R2.0 billion and 2013: R1.9 billion) and our return on investment (ROI) for the year was 18.3% (2015: 17.1%, 2014: 17.0% and 2013: 19.4%).

Taking the above performance into account, the Remuneration Committee is satisfied that the remuneration policy, and its implementation, are appropriately aligned to the achievement of Massmart’s strategic objectives.

Forward looking targets

The Group’s Executives, including the Executive Directors, are incentivised around the achievement of each year’s actual financial performance compared to the annual business plan approved by the Board the previous year. As explained within our policy which follows, performance is measured against three dimensions being: operating profit before interest and taxation (but from 2017 this will be profit before taxation), total sales, and return on invested capital. Disclosing these forecast figures for the purposes of this report would however, be revealing confidential and commercially sensitive information.

In finalising the annual business plan for the following financial year, the Board considers the prevailing and forecast economic conditions in all countries where we operate, key business objectives, the pursuit of growth, capital investment programmes, the relative business maturity and the appropriate degree of improvement in business performance. As can be seen from the historical targets noted elsewhere, previous annual business plans have incorporated real growth in total sales, improved operating performance and improved returns on invested capital.

Director changes

In August 2016, I handed over the chairman roles of the Audit and Risk Committees to Moses Kgosana, at which time I also ceased to be a member of both committees. We believe Moses Kgosana is an excellent candidate to lead these important committees.

Key remuneration issues deliberated by the Remuneration Committee in 2016:

  • Decision to extend participation in the long-term incentive scheme to skilled/junior management level employees, increasing the portion of their remuneration linked to Group strategic priorities and shareholder interest;
  • On-going deliberation about non-financial Annual Incentive Plan (AIP) metrics with the aim of improving the alignment to King IV recommendations;
  • Review and approval of the Group’s recruitment and retention strategies for key executive management roles e.g. our annual Executive fireside chats remain a positive and informative process;
  • Succession planning – this is a topic that remains relevant and was discussed to ensure future success; and
  • Robust discussions about transformation and gender diversity at a Board level.

Key remuneration priorities for 2017:

  • Implement the change in Incentive metric from approved Group operating income to approved profit before tax (PBT), enforcing more accountability for the Group’s net working capital and overall level of interest-bearing debt.
  • Enhance our Employee Value Proposition to retain key talent as well as to attract critical skills as may be required to meet strategic objectives.

Non-binding advisory vote

Each year at the Annual General Meeting (AGM), in accordance with King III, the Group remuneration policy is put to a non-binding advisory vote, allowing shareholders to express their views on the policy adopted. Massmart will once again table its remuneration policy for a non-binding advisory vote by shareholders at its 2017 AGM, having received an 84.7% vote in favour of the policy at the AGM held on 26 May 2016.

As a Group we value the opinion of our stakeholders and we believe that strong stakeholder engagement strengthens the relationship between them and our Board, helping to ensure the effectiveness of our Board and their alignment to all stakeholder interests. In line with the principles set out in King IV, we proactively engaged with our shareholders, as a key stakeholder, on this policy. Below are some of the comments we received in this process and I am confident that this year’s report successfully addresses these.

Please consider disclosing variable pay performance targets: The Board recognises that shareholders would wish to see prospective performance or financial targets but is concerned at the likely commercial sensitivity of these. We do however disclose previous targets and the relative achievements thereto.

Please consider changing the order of the report and specifically bringing the application of the policy ahead of the policy itself: We believe that without first understanding the Group’s remuneration philosophy and policy, it will be very difficult to interpret the application thereof.

Please improve performance metrics used: The business continues to consider a non-financial AIP metric for employees at an Executive level.

Please disclose any adhoc awards made in the year: There were no discretionary awards in 2016.

 

Executive remuneration overview

The following table provides an overview of the Executive Directors’ remuneration for 2016, explained in detail in Section C of this report.
  Guy Hayward   Johannes van Lierop
R’000          
Guaranteed package     6,129.0   5,660.0
Other benefits     757.0   2,666.0
Short-term incentive (101.2% of target achieved)     6,123.8   4,913.1
Total 2016 (excluding first-time long-term incentive vestings)     13,009.8   13,239.1
Total 2015     11,956.5   12,266.1
% increase     8.8%   7.9%
% of earnings performance-based     47.1%   37.1%
Long term incentive** Performance Shares vested   2,150.8  
  Restricted Shares vested   293.5  
Total 2016 (including first-time long term incentive vestings)     15,454.1   13,239.1
* Long-term incentive shares vested for the first time in the current year.

 
The information provided in this report has been approved by the Board on the recommendation of the Remuneration Committee.

 

Chris Seabrooke
Chairman of the Remuneration Committee
31 March 2017

 
 

 

 

Section B: Remuneration policy

 
 

Remuneration philosophy

The purpose of Massmart’s remuneration philosophy is to establish fair and equitable reward levels that will attract, motivate and retain high calibre employees. This is in line with the Group’s culture and values, whilst aligning remuneration with shareholder interests and best practice in the retail environment. We strive to ensure that our remuneration policy supports the development and retention of top talent and critical skills. Its purpose is to ensure a workforce that is motivated to successfully develop, implement and support the Group’s business strategy. The focus is on ensuring the long-term growth and success of the Group and the enhancement of stakeholder value.

The desired outcome of our remuneration programmes is to:

  • Provide competitive and equitable remuneration, based on an employee’s skills, performance and contributions to the Group, among other factors;
  • Attract and retain the talent necessary to achieve the Group’s business objectives;
  • Develop a sense of Group ownership and align the interests of employees with those of its shareholders; and
  • Provide opportunities for the potential of greater financial rewards to those who perform well within their job responsibilities.

Massmart’s total reward offering

Guaranteed remuneration

The guaranteed remuneration of Executive Directors is set according to annual benchmarking using data from the PwC Remchannel and the Korn Ferry Hay Group salary surveys as well as specific benchmarking to other similar sized JSE listed companies. The TGP is benchmarked to the median, but if stretch performance is achieved for the AIP and SIP, the total reward package is intended to pay out at the 75th percentile. Massmart remains committed to ensuing competitive remuneration packages whilst managing costs. Annual TGP increases for Executive Directors are determined by the Remuneration Committee and are aligned to individual performance and the annual salary increase percentage range as set for the Group.

 

TOTAL GUARANTEED PACKAGE (TGP)

Overview The Total Guaranteed Package provides a fixed remuneration package as determined to be appropriate and market-aligned for each particular level and or role. TGPs are reviewed annually against market data and increases are awarded on TGP in July each year. The actual percentage increases awarded are determined by taking CPI, business performance, market trends and individual merit into account, whilst also considering salary positioning against the Massmart salary structure and market data.
Basic salary The basic salary is calculated from the TGP and is used as a basis for the Pensionable Salary and Annual Incentive Plan.
 
Expatriate employees working for Massmart in South Africa receive a basic salary denominated in US Dollars as well as additional non-cash benefits e.g. housing, schooling and home leave.
Retirement benefits All permanent employees are required to belong to a Group-approved retirement fund. The current Group-approved funds are all defined contribution schemes. The funds provide the employee with an opportunity to save for retirement. Life, disability and funeral cover are also provided to all permanent employees. Alexander Forbes has administered the Massmart funds for a number of years. A formal service level agreement is in place that regulates this relationship. The trustees of the funds monitor fund performance on a quarterly basis. The Company contributes 10.5% of Pensionable Salary to the retirement fund and related insurances. Employees contribute at least 7%. Expatriate employees are paid a cash allowance in lieu of retirement benefits.
Medical aid benefits It is compulsory for all new permanent Massmart Group employees to join a Company-approved medical plan. The Group has the responsibility of ensuring that appropriate plans are offered by the Massmart Health Plan and that contribution levels are sustainable and affordable for all levels of employees. Expatriate employees are covered by a separate international medical insurance. The Company contributes a portion of the medical aid fund contribution; the difference is contributed by the employee.
Car/travel benefits Travel allowances, or company cars, are provided to nominated employees to enable them to perform their duties, as required. The quantum of the allowance or company car value is determined based on the requirements of each specific level and/or role.

 

 

Incentives

Massmart offers both short and long-term incentives; these are further described below.
These performance measures are set and approved by the Remuneration Committee on an annual basis.

Massmart believes in rewarding employees for performance that is aligned to shareholders’ interests, in particular the sustained creation of shareholder value. In prior years, various share schemes were established to recognise and reward different levels of employees. In May 2013, the Massmart Share Incentive Plan that is more closely aligned to the Walmart approach, was approved and replaced all other share schemes. No further share options are issued from either the Massmart Holdings Limited Employee Share Trust; the Massmart Black Scarce Skills Trust; or the Massmart Thuthukani Empowerment Trust. Those options which have not yet vested through the above-mentioned Trusts will still vest according to the relevant rules and plans.

 
+ Short Term Incentive

ANNUAL INCENTIVE PLAN (AIP)

Purpose The AIP aims to incentivise and reward the achievement of the approved annual operating income targets. Massmart places particular emphasis on generous annual incentives for high performance.

Eligibility

Executives and employees from a certain staff level are able to participate in the AIP, subject to Remuneration Committee approval.
Formula Participating employees can earn an increasing multiple of their monthly basic salary dependent upon achievement against the agreed targets.
Performance

Financial performance: Currently the AIP for Executive Directors is based only on Group financial performance against approved operating income targets for both the Massmart Group and its Divisions. As noted in the key priorities for 2017, the performance measure of the AIP has been changed to PBT for 2017. The Board is reviewing this structure with a possibility of adding specific non-financial metrics in the future.

Group Executives are 100% incentivised on Group Performance, Divisional CEOs are incentivised on 50% of Group performance and 50% on Divisional performance, while Divisional Executives are incentivised on 75% of Divisional performance and 25% of Group performance.

Individual performance: At the lower levels of the AIP an individual metric, based on employee performance, is included.

Bonus pay-outs

At Executive level the bonus pay-outs per achievement level are:


*A super-maximum level may be agreed and approved by the Remuneration Committee.

Discretion of the Remuneration Committee

Outside of the AIP, the Remuneration Committee also has the option to provide discretionary awards to reward individual performance. The discretionary awards are capped at not more than 25% of target AIP. If awarded, these incentives are paid annually.

 

 

+ Long Term Incentive

Massmart believes in rewarding employees for performance that is aligned to shareholders’ interests, in particular the sustained creation of shareholder value. In prior years, various share schemes were established to recognise and reward different levels of employees. In May 2013, the Massmart Share Incentive Plan that is more closely aligned to the Walmart approach, was approved and replaced all other share schemes. No further share options are issued from either the Massmart Holdings Limited Employee Share Trust; the Massmart Black Scarce Skills Trust; or the Massmart Thuthukani Empowerment Trust. Those options which have not yet vested through the above-mentioned Trusts will still vest according to the relevant rules and plans.

SHARE INCENTIVE PLAN (SIP)

Purpose

The SIP is a long-term equity-based incentive plan. A combination of Performance Shares and Restricted shares is awarded to qualifying employees.

Eligibility

Full-value share rights are awarded bi-annually to qualifying permanent employees. Initial qualification is based on motivation by the Executive Committees of each of the Divisions. Final approval for participation is provided by the Remuneration Committee.Eligibility and award values have been benchmarked to the PwC-reported long-term incentive awards and Massmart is positioned in the upper quartile.

Operation and instruments

Performance Shares: The performance share plan has specific performance metrics that have been designed to align with Walmart’s metrics and are measured individually against approved Group-level annual nominal sales and ROI targets, over three separate years, with an equal weighting (50% nominal sales and 50% ROI). Each target has a range and the final awards are calculated based on a sliding scale in the range of 50% to a maximum of 150%.
If achieved, the awards are equity-settled at the end of the third year. If performance against either of the targets falls below the minimum of the range, no performance share awards will be earned against that target.

Restricted Shares: Restricted share grants are specifically utilised for retention purposes and vest on a time basis, being one third each at the end of years 3, 4 and 5. There are no performance conditions applicable to the restricted shares. Restricted shares are aimed at retaining of employees with the long-term reward linked to share price growth.

Mix of awards

The plan provides for a mix of performance shares, which are awarded annually in March/April and grants of restricted shares which are granted annually in September, based on the level of the employee. At Executive Director levels, the mix is 75% performance shares/25% restricted shares and at other levels, 50%/50%.

Value of awards

Currently, at Executive Director level, the award value of the award is 100% of guaranteed package.

Limits

The cumulative total of all shares over the period of the scheme that can be offered via the scheme is 39.5 million shares. Individually, one participant may not exceed four million shares.

Settlement

The settlement of grants and awards are done primarily through on-market share purchases.

Discretion of the Remuneration Committee

The Remuneration Committee may approve special restricted share awards to employees which the Company wishes to recognise for extraordinary achievements.

 

 

 

Executive pay mix

Anticipated contribution to total annual packages

The Committee believes that over an extended period and subject to business performance, Executives’ total annual remuneration (TAR) should comprise approximately equal amounts from TGP, AIP and SIP. The amounts received annually under AIP will vary depending on the achievement of the set targets, while those received under the SIP will also vary depending on the business achievement of targets and the growth of the Massmart share price.

It is anticipated that about two thirds of Executives’ remuneration should be variable and conditional upon sustainably improving business performance.

Potential award mix

The following chart shows the potential mix of TAR for Executive Directors:

 

 

Non-Executive Directors

One-third of the non-Executive Directors are required to retire every year and Massmart Executive Directors have elected to also retire on this basis. As a result, all Directors retire by rotation at least every three years and are then eligible to offer themselves for re-election. In addition, shareholders must ratify the initial appointment of each Director at the first AGM following that Director’s appointment. All Committee members complete detailed self-assessments covering the composition, duties, responsibilities, process and effectiveness of the relevant committees. The results of these assessments are collated by the Company Secretary and sent in summarised form to the Chairman for a formal written response. The summarised results, together with the Chairman’s written response, are included in the Board papers at the November Board meeting.

Non-Executive Director fees

These fees remunerate the independent non-Executive Directors for their time, responsibilities and commitment to Massmart.

Each independent non-Executive Director receives a fixed fee for their services based on their Board membership and membership of the Board Committees.

The Board has elected to pay a fixed fee only, without the payment of additional attendance fees. This decision was taken on the basis that many Directors provide expertise that extends beyond the boardroom.

The remuneration of independent non-Executive Directors is reviewed annually by the Remuneration Committee and the Board after a benchmarking exercise against market. Fees are required to be competitive but not necessarily in the top quartile of the market. Recommendations for increases are made to shareholders at the AGM for consideration and approval.

The Walmart-appointed non-Executive Directors do not receive fees from Massmart.

Non-Executive Directors do not qualify for participation in any share plan or incentive scheme.

Proposed fees 2017

For several years only inflation-linked fee increases have been proposed for most of the sub-committee roles. Following a recent benchmarking exercise of the upper-quartile of the South African market, the below-mentioned increases are proposed for the non-Executive Directors and the various committee roles. The increases take into account the aggregate fees that each Director will earn given their committee roles. For this reason, the proposed independent non-Executive Directors’ fees of R400,000 are typically lower than the market (upper quartile). In addition, it was felt that the fees for the Audit Committee Chairman and members did not represent the appropriate reward for the greater risks and responsibilities associated with that committee’s role. Finally, the Deputy Chairman’s fee has been adjusted to reflect the additional responsibilities of the Lead Independent Director as envisaged in King IV.

Role   2017 Fee
(R’000)
  2015 Fee (R)   % Change
Chairman of the Board   1,500.0   1,270.0   18.1%
Deputy Chairman of the Board   800.0   660.0   21.2%
Independent non-Executive Directors   350.0   350.0   14.3%
Audit Committee Chairman   275.0   267.1   31.0%
Risk Committee Chairman   275.0   267.1   3%
Remuneration Committee Chairman   275.0   252.0   9.1%
Nomination and Social and Ethics Committee Chairmen   275.0   252.0   9.1%
Audit Committee member   175.0   128.0   36.7%
Other Board Committee members   140.0   128.0   9.4%

 

The Remuneration Committee and its role

Composition

The Remuneration Committee consists of three non-Executive Directors, two of whom are independent. Meetings are held four times per year and more often if deemed necessary. The CEO is a permanent invitee to all Committee meetings. Other nominated Executives attend meetings by invitation. Neither the CEO nor nominated invitees are present when matters relating to their own remuneration are discussed. The Group General Counsel acts as secretary for the Committee.

Responsibilities

In accordance with the Remuneration Committee Charter, as approved by the Board, the responsibilities of the Committee include:

  • Reviewing the Group remuneration strategy and policies to ensure alignment with the Group strategic, operating and financial objectives and remuneration best practice principles;
  • Evaluating the remuneration packages of the Executive Directors and Group Executive Committee members to ensure TGP is market-competitive and fair, and AIPs and SIPs are equitably related to relevant performance indicators;
  • Approving performance-related AIP and SIP targets;
    Making recommendations to the Board on amendments to AIP and SIP schemes;
  • Reviewing and recommending independent non-Executive Directors’ and Board Committee members’ fees and also the fees of any Director-related entities providing services to the Group;
    Reviewing Group remuneration practices and policies; and
  • Selecting independent consultants to advise the Board where appropriate.

 

A full account of the role and responsibilities of the Remuneration Committee is described in the Remuneration Committee Charter and is available on request.

 

Section C: Application of the remuneration policy during the year ended December 2016

 

Actual pay-outs and increases

Total Guaranteed Package

The Committee remains alert to the concentrated and highly competitive nature of the South African retail market, as well as a shortage of retail-specific skills, and sets remuneration levels accordingly. In 2015 the committee approved a number of market related adjustments which were to be phased in over a few years and the 2016 annual increase average again includes a number of these market-related adjustments.

In July 2016 increases awarded to Massmart’s Executive Directors, the Executive Committee and Divisional management teams averaged 8.72%.

 

 

Annual Incentive Plan

2016 performance:

As disclosed on page 75, the AIP for 2016 is linked to approved annual operating income targets for both the Massmart Group and its Divisions and is fully aligned with Walmart’s policy. The following illustration shows the achievement to plan and actual payouts received by the Executive Directors. No discretionary bonuses were paid in 2016.

2017 performance measures:

As noted in the key priorities for 2017, the performance measure of the AIP has been changed to 100% profit before tax (PBT) for 2017.
The Board supports the transparent reporting of Executive remuneration but they believe that the prospective PBT target, which forms the basis for the AIP achievement and payout calculation, is commercially sensitive information and this has therefore not been disclosed.

 

 

Share Incentive Plan

The SIP was established in September 2013 and is linked to approved ROI and sales targets (refer to page 76 for more information). The first vesting of this new plan took place in September 2016.

The next vesting of performance share awards will take place in March 2017 (for performance in years 2014/5/6). This vesting, resultant of awards issued in 2014, will be as a result of the following performance achievements to target in the subsequent three years: 108.2% for 2014, 100.1% for 2015 and 104.4% for 2016.

The next vesting of restricted share grants will take place in September 2017.

The illustration below shows previous performances against approved level annual nominal sales and ROI targets.

* The Board believe that the sales and ROI targets which form the basis for the SIP achievement and payout calculation are commercially sensitive information and therefore not all targets have been disclosed.

2016 share vesting:

Johannes van Lierop had no shares vesting in 2016 as he only joined Massmart in early 2015.

 

Executive Directors’ contracts and earnings

The comments below provide further background and context to the figures disclosed in the tables which follow and the composition of remuneration outcomes in 2016 for the CEO and CFO are represented graphically below.

 

Guy Hayward

Guy was awarded a 6.53% annual guaranteed package increase in July 2016. In terms of Massmart’s AIP, Guy received an incentive payment of R6.1 million (equivalent to 13.0 months of salary) based solely on the Group’s actual operating income performance against the 2016 plan. During the year to December 2016 Guy did not convert or sell any Massmart options or shares. Through the Employee Share Trust, Guy holds 456,906 Massmart shares and options of which 19,912 shares are held by the Bluett-Hayward Trust, of which Guy is a trustee and a discretionary beneficiary. The average length of time that he has held these is 6.25 years and the average strike price is R124.67 per share. Guy also owns 47,126 Massmart shares directly. Through the SIP, Guy was awarded 37,719 performance share awards on 18 March 2016 and 13,953 restricted share grants on 16 September 2016. Whilst Guy does not have a fixed-term contract, he is contractually bound by a notice period of twelve months.

 

Details shares and share options:

                     
    Award /grant dates   Subscription price (R)   Number of shares/share options   Gain on sale/exercise (R 000’s)   Expiry date
Employee Share Option Scheme                    
Balance at December 2015            456,906      
Options exercised/ shares sold            
Balance at December 2016            456,906        
Comprising:   24 May 2007    94.25    24,444     23 May 2017
    1 April 2008    66.91    19,912     31 March 2018
    26 May 2008    72.86    36,573     25 May 2018
    27 May 2009    77.56    105,448     26 May 2019
    1 September 2011    153.84    120,987     31 August 2021
    16 May 2012    159.62    149,542     15 May 2022
                     
Employee Share Incentive Plan                    
Balance at December 2015            113,847        
Performance shares vested / lost*   16 September 2013      (20,848)     15 September 2016
Restricted shares vested   16 September 2013      (2,316)     15 September 2016
Performance share award top-up*   17 March 2014      1,393     16 March 2017
Performance share awards   18 March 2016      37,719     17 March 2019
Restricted share grants   16 September 2016      13,953     15 September 2021
Balance at December 2016            143,748        
Comprising: Restricted share grants   16 September 2013      4,634     15 September 2018
                       Performance share awards   17 March 2014      34,179     16 March 2017
                       Restricted share grants   15 September 2014      11,506     14 September 2019
                       Performance share awards   16 March 2015      27,559     15 March 2018
                       Restricted share grants   15 September 2015      14,198     14 September 2020
                       Performance share awards   18 March 2016      37,719     17 March 2019
                       Restricted share grants   16 September 2016      13,953     15 September 2021
                     

 

Johannes van Lierop

Johannes was awarded a 2% annual salary increase on his US-dollar denominated basic salary in July 2016. In terms of Massmart’s AIP, Johannes received an incentive payment of R4.9 million (equivalent to 13.0 months of salary) based solely on the Group’s actual operating income performance against the 2016 plan. During the year to December 2016 Johannes did not sell any Massmart shares. Through the SIP, Johannes was awarded 37,199 performance share awards on 18 March 2016 and 11,578 restricted share grants on 16 September 2016. Whilst Johannes does not have a fixed-term contract, he is contractually bound by a notice period of twelve months.

 

Details shares and share options:

                     
  Award /grant dates   Subscription price (R)   Number of shares/share options   Gain on sale/exercise (R 000’s)   Expiry date
Employee Share Incentive Plan                    
Balance at December 2015            107,678        
Performance share award top-up due to performance conditions   16 March 2015      22     15 March 2018
Performance share awards   18 March 2016      37,199     17 March 2019
Restricted share grants   16 September 2016      11,578     15 September 2021
             156,477        
Comprising: Performance share awards   16 March 2015      71,517     15 March 2018
                       Restricted share grants   16 March 2015      23,832     15 March 2021
                       Restricted share grants   15 September 2015      12,351     14 September 2021
                       Performance share awards   18 March 2016      37,199     17 March 2019
                       Restricted share grants   16 September 2016      11,578     15 September 2021
                     

 

Non-Executive Directors’ contracts and payments

As approved by the shareholders at Massmart’s May 2016 AGM, the following fees were paid to non-Executive Directors in the financial year ending December 2016:

  

Role   2016 Fee
(R’000)
 
Chairman of the Board   1,270.0  
Deputy Chairman of the Board   660.0  
Independent non-Executive Directors   350.0  
Audit and Risk Committee Chairman   267.1  
Other Board Committee Chairmen   252.0  
Board Committee members   128.0  

 

Section D: Remuneration tables

 
+ Directors’ emoluments

The following disbursements were made by Massmart Holdings Limited to Massmart’s Directors in the years ending December 2016 and December 2015 respectively:

                                     
                                     
R000   Services as Directors of Massmart Holdings Limited   Salary and allowances   Bonuses and performance related payments1   Other benefits   Retirement and related benefits   Subtotal   Fringe benefit of interest-free loans used to finance shares2   Gains on exercise of share options and on shares purchased by Directors   Total
                                     
Executive Directors                                    
Hayward, GRC     5,551   6,124   757   578   13,010   829     13,839
van Lierop, J     5,660   4,913   2,666     13,239       13,239
      11,211   11,037   3,423   578   26,249   829     27,078
Non-executive Directors                                    
Dlamini, KD   1,621           1,621       1,621
Seabrooke, CS   1,432           1,432       1,432
Clarke, A                  
Gwagwa, NN   600           600       600
Ostale, E3                  
Kgosana, R   700           700       700
Langeni, P   852           852       852
Suarez, JP                  
    5,205           5,205       5,205
                                     
Total   5,205   11,211   11,037   3,423   578   31,454   829     32,283
                                     
The Board is wholly responsible for the formulation, development and effective implementation of Group strategy. The Board has gained progressive insight into the definition of a ‘prescribed officer’ following the issuance of guidance from SAICA and, in turn, delegates operational strategy implementation and general executive management of the business to its Executive Directors. As such, in terms of Regulation 38 of the Companies Act 2008, those previously designated as prescribed officers are no longer deemed to be.
                                     
                                     
R000   Services as Directors of Massmart Holdings Limited   Salary and allowances   Bonuses and performance related payments1   Other benefits   Retirement and related benefits   Subtotal   Fringe benefit of interest-free loans used to finance shares2   Gains on exercise of share options and on shares purchased by Directors   Total
                                     
Executive Directors                                    
Hayward, GRC     5,175   5,273   965   543   11,956   834     12,790
Zwarenstein, I4     671       63   734       734
van Lierop, J5     4,106   5,582   2,222   356   12,266       12,266
      9,952   10,855   3,187   962   24,956   834     25,790
Non-executive Directors                                    
Dlamini, KD   1,440           1,440       1,440
Seabrooke, CS   1,531           1,531       1,531
Broader, S6                  
Clarke, A                  
Gwagwa, NN   543           543       543
Kgosana, R7   185           185       185
Langeni, P   795           795       795
Suarez, JP                  
    4,494           4,494       4,494
                                     
Total   4,494   9,952   10,855   3,187   962   29,450   834     30,284
                                     
1In order to match incentive awards with the performance to which they relate, bonuses above reflect the amounts accrued in respect of each year and not amounts paid in that year.
2Held in terms of the rules of the Company’s share scheme.
3Appointed with effect from 24 February 2016.
4Resigned with effect from 12 March 2015.
5Appointed with effect from 12 March 2015.                    
6Resiged with effect from 9 November 2015.                    
7Appointed with effect from 1 September 2015.