Remuneration report

Reward philosophy:

"The Motus remuneration policy is formulated to attract and retain high-calibre executives and motivate them to develop and implement the Group's strategy to optimise long-term shareholder value, as well as to align the entrepreneurial ethos and long-term interests of senior management and executives with those of the shareholders".

Oshy Tugendhaft

Outgoing
RemCo Chairman

JJ Njeke

Incoming
RemCo Chairman

This report comprises four sections:

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  • Section 1
    Statement from the
    remuneration
    committee
    Chairman
  • Section 2
    Remuneration
    governance
  • Section 3
    Remuneration
    policy
  • Section 4
    Implementation of
    remuneration policy

Introduction

Section 1:
Statement from the Remuneration Committee Chairman

On behalf of the Remuneration Committee (RemCo), I am pleased to present the Group's remuneration report, which sets out the governance of the remuneration policies, remuneration, and its implementation for the financial year.

I would like to thank Ms. P Langeni for her valuable contribution over the years. Ms. P Langeni stepped down as a director and RemCo member at the AGM in November 2020. I welcome Mr. MJN Njeke as a RemCo member. I would like to thank my fellow members, Mr. GW Dempster and Mr. MJN Njeke, for their insightful contribution that allows RemCo to perform its duties effectively and efficiently.

Background statement

RemCo and the board welcome and consider our shareholders' views in our deliberations, which begins with ensuring that our disclosure relating to executive remuneration is transparent. We are careful not to depart from the expectations set by our performance criteria, even when factors outside our control stifle or enhance performance. We believe the remuneration policy incentivises long-term strategic decision-making that serves sustainable value creation. Throughout the Group, we attempt to compensate individuals fairly for a specific role, with due regard to their skills, areas in which they operate and their specific performance.

At the 2020 AGM, 88% of shareholders voted in favour of the Group's remuneration policy. However, 69% of shareholders voted in favour of its implementation. In line with the Group's policy and King IV, if 25% or more of the votes exercised at the AGM are against the remuneration policy and/or its implementation, selected members of the board will engage with the shareholders to understand the reasons for their vote.

As a result of our subsequent interactions with shareholders, we have implemented changes, which relate to the remuneration policy and enhanced disclosures in the implementation report. These changes are detailed in this report, and we trust that they will address the concerns raised.

Key focus areas

The Group regularly benchmarks the remuneration packages of the non-executive directors, executive directors, and senior staff members with the assistance of independent remuneration specialists. The benchmarking exercise performed during the year included executive directors and prescribed officers. The review included: total guaranteed pay (TGP), short-term incentives (STIs), long-term incentives (LTIs), and key performance criteria, as well as confirming the constituents of the peer group. Findings confirmed that the respective remuneration packages are aligned to the market and the remuneration mix has a higher proportion of variable pay, which supports the Group's pay-for-performance reward philosophy.

RemCo considered the feedback of shareholders and the benchmarking survey, and approved:

  • The general composition of executive remuneration packages.
  • The key performance criteria for STI and LTI awards, including the composition of the peer group.
  • Salary increases, STI, and LTI awards made to executive management in accordance with set performance criteria.
  • Minimum shares to be held by executive directors and prescribed officers.
  • The remuneration of non-executive and executive directors, prescribed officers and business unit leaders.

Specific actions taken during the COVID-19 crisis (commenced in the previous financial year)

The COVID-19 crisis impact on the South African, UK and Australian economies, resulted in certain decisions in the 2020 and 2021 financial years, aimed at protecting the sustainability of the Group and retaining key management skills.

Once-off decisions and related actions taken by the board and management included:

  • A 20% reduction in the remuneration of the Group CEO and the UK CEO, a 15% reduction for non-executive and executive directors, and other executive committee members, for six months from 1 April 2020.
  • A 10% reduction in the remuneration for employees earning above R500 000 per annum, apart from those mentioned above, for a period ranging between three to six months, between 1 May 2020 and 30 September 2020.
  • A 5% reduction in the remuneration for employees earning between R250 000 and R500 000 per annum, for a period ranging between three to six months, between 1 May 2020 and 30 September 2020.
  • No annual inflationary increases in the remuneration of non-executive, executive directors and other executive committee members for the 12 months to 30 June 2021. Inflation-adjusted salary increases were last made on 1 July 2019.
  • Annual inflationary increases for employees, excluding non-executive and executive directors and other executive committee members, were implemented from 1 April 2021, with the next salary review being 1 July 2022. Inflationary increases for non-executive and executive directors and other executive committee members were implemented from 1 July 2021.

Shareholder engagement and changes to remuneration policy and disclosure

The board Chairman and Chairman of RemCo proactively contacted and engaged with shareholders through virtual meetings or written correspondence. Although the engagement focused primarily on the implementation of the Group's remuneration policy, broader policy issues were also raised and considered.

Concerns raised and our response and actions are summarised below:

Shareholder feedback Comment Action
Remuneration policy
Consider a shorter time frame to achieve minimum shareholding requirements (MSR) for executive directors and prescribed officers. The target has to be achieved within five years from 1 July 2019 (or from joining date), unless otherwise determined by RemCo considering market conditions and related factors. The time frame to achieve the MSR levels is considered appropriate. The majority of executive directors and prescribed officers have already achieved the MSR target.
Remuneration levels for executives are considered high. The Group regularly benchmarks the remuneration packages of the non- executive and executive directors, and senior staff members with the assistance of independent remuneration specialists. Based on the benchmarking exercise, executive remuneration levels are considered appropriate. The last inflation-adjusted salary increases for executives were made on 1 July 2019.
Implementation
Performance targets for STIs and LTIs are not sufficiently detailed. Setting future financial targets to achieve STIs and LTIs requires the sharing of competitor-sensitive financial information. Achievement of past targets will be disclosed. Additional disclosure has been provided for the performance criteria related to the 2021 financial year.
Certain performance criteria are not considered, specifically ESG measures. Management recognises the importance of ESG for the sustainability of the Group. Criteria have been revised to include additional ESG measures for the 2022 financial year.
The additional 10% STI payment made to certain executives and prescribed officers for effectively managing the business during the COVID-19 crisis was not supported. After careful consideration, RemCo exercised its discretion set out in the Remco policy to award certain executive committee members 10% of the maximum 15% discretionary STI incentive, to recognise their exceptional performance during the COVID-19 crisis in the 2020 financial year. The once-off 10% payments relating to the 2020 financial year were exceptional but warranted. No such payments were made for the 2021 financial year.
The Chairman of RemCo is not independent. The Chairman was a director and RemCo member at Imperial Holdings Limited prior to the unbundling. He provided continuity and guidance during and after the unbundling of Motus. Mr. A Tugendhaft will step down as the Chairman of RemCo and will remain a member of the committee Mr. MJN Njeke, an independent non-executive director, will at the same time be appointed as Chairman of RemCo. Both actions will take effect 3 November 2021, upon approval by shareholders at the AGM.

RemCo, on behalf of the Motus Group, would like to thank shareholders for taking the time to engage with us, and we commit to ongoing constructive engagement on the remuneration policy and its implementation.

Conclusion: In keeping with the recommended practices of King IV, both the remuneration policy and its implementation will be tabled for shareholder approval by separate non-binding advisory votes at the AGM on 3 November 2021. RemCo and the board will continue to consider the views expressed by shareholders and we remain deeply committed to sound governance, responsible decision-making and transparency on executive compensation.

Should 25% or more of the voting rights exercised at the 2021 AGM be voted against the remuneration policy and/or its implementation, the board will in good faith commence engaging with shareholders to ascertain the reasons and take steps to address their valid objections and concerns raised, which may include amending the remuneration policy or clarifying or adjusting remuneration governance and/or processes.

The board will also disclose the steps taken to address any concerns that may be raised.

Remuneration governance

Section 2:
Remuneration governance

Remuneration committee

Committee Chairman

The committee is chaired by Mr. A Tugendhaft, a non-executive director.

Mr. A Tugendhaft will step down as Chairman of RemCo, and will remain as a member of the committee. Mr. MJN Njeke, an independent non-executive director, will be appointed as Chairman of RemCo. This change will take effect from 3 November 2021, following approval at the AGM.

Role of the committee

RemCo advises and guides the board on the following:

  • Accurate and transparent disclosure of directors' remuneration.
  • The establishment and implementation of remuneration policies for non-executive directors, executive directors, and other executives, to ensure fair and responsible remuneration.
  • Approval of the general composition of remuneration packages for executive directors and prescribed officers, including increases, criteria for STI and LTI incentives, benchmarked against the appropriate peer group.
  • Remuneration increases to non-executive directors' fees to be proposed for shareholder approval.
  • Material changes to the Group pension and provident funds, and medical aid schemes where appropriate.
  • The administration of share-based incentive schemes.
  • Ad hoc advice on remuneration and related issues impacting the Group's executives.

The NomCo and RemCo consider succession plans regularly for executives and non-executive directors and senior management. This process includes:

  • The identification of current incumbents in key positions.
  • An assessment of how long the current incumbent is expected to remain in the position.
  • Identification of candidates that are vulnerable due to age, health, or attractiveness to competitors.
  • Identification of potential short-term and long-term successors, both internally and externally.
  • Positioning and development of potential successors.
Committee membership

All members are non-executive directors, and the majority are independent. Mr. A Tugendhaft, who is a non-executive director, is not classified as independent in terms of King IV, as his firm, TWB, provides legal services to the Group. Mr. A Tugendhaft, however, provides continuity and guidance on account of his seniority and longstanding RemCo membership. As detailed above, he will step down as Chairman of RemCo from 3 November 2021.

The Group CEO and CFO attend RemCo meetings by invitation and assist the committee in its deliberations, except when their own remuneration and performance are discussed. No director can decide his or her own remuneration.

Members Attendance
Chairman: A Tugendhaft 3/3
Members:
GW Dempster 2/3
P Langeni1 1/1
MJN Njeke2 2/2
1 Resigned on 10 November 2020
2 Appointed on 15 September 2020.

Governance

Section 3:
Remuneration policy

Reward philosophy

The remuneration policy is formulated to attract and retain high-calibre executives and motivate them to develop and implement the Group's strategy to optimise long-term shareholder value. It also aims to align the entrepreneurial ethos and long-term interests of senior managers and executives with those of shareholders. The company's pay mix has a higher proportion of variable pay, appropriate for the retail nature of the business and in line with the pay-for-performance reward philosophy.

Fair and responsible remuneration

The remuneration policy is intended to conform to best practice. It is structured around the following key principles:

  • Total rewards are set at levels that are responsible and competitive within the relevant market.
  • Incentive-based rewards (STIs and LTIs) are capped and earned through the achievement of growth and return targets that are consistent with shareholder interests over the short, medium and long term.
  • Incentive plans, performance measures and targets are structured to remain sound throughout the business cycle.
  • The design and implementation of STI and LTI schemes are prudent and do not expose shareholders to unreasonable financial risk.

Alignment to strategy

Our strategic focus is centred on deepening our competitiveness and relevance across the automotive value chain, by driving organic growth through optimisation and innovation, and leveraging existing capabilities and networks. Further selective expansion involves the introduction of additional brands and businesses in areas close to existing dealerships via bolt-on acquisitions locally and internationally, strategic acquisitions in the Aftermarket Parts business to enhance the supply chain, and bolt-on acquisitions of technology companies to enhance the Financial Services business.

Our five strategic pillars include:

Five strategic pillars

To drive the achievement of the Group's or company's strategy, up to 85% to 90% of an individual's performance measurement includes objectives aligned with the achievement of the operating entity's strategic focus areas.

Determination of performance incentives

Motus has various formal and informal frameworks for performance management that are directly linked either to increases in TGP and/or annual STIs. Performance management and assessment take place regularly throughout the Group, where company performance, personal achievement of key performance criteria, and delivery on key strategic imperatives are discussed.

2021 2020
Total number of employees 16 708 17 499
Total compensation paid to employees (Rm) 6 606 6 633

Remuneration breakdown

The Group's employees are crucial to our success. Employee remuneration, particularly TGP, is a significant component of the Group's total operating costs. The remuneration policy seeks to attract and retain quality employees at all levels. Remuneration is structured to be competitive and relevant in the sectors in which the Group operates.

Salaried employees

Total guaranteed pay (TGP)
  • TGP is monitored and benchmarked on an ongoing basis.
  • Remuneration levels consider industries, sectors and geographies from which skills are acquired or to which skills are likely to be lost, the general market and the market in which each business operates.
  • TGP and the mix of fixed and variable pay are designed to meet the industry standards, operational needs and strategic objectives of each business, based on stretch targets that are verifiable and relevant.
  • The structure of remuneration for unionised employees is driven by collective bargaining and sectoral determinations.
  • Adjustments to TGP levels are normally effective from 1 July each year. In unionised environments, collective bargaining arrangements may be implemented at other agreed times.
  • Annual increase parameters are set using guidance from Group budgeting processes, market movements, individual performance, the performance of the division and/or company and other relevant factors.
  • Increases above inflation depend on divisional or departmental and individual performance.
   
Short-term incentive (STI)

Divisions pay STIs aligned to industry best practice and in some cases include a guaranteed bonus equal to one month's salary.

In all cases, incentives depend on the performance of the individual and business in which they are employed. Performance criteria are set for each individual, depending on the requirements of the job.

   
Long-term incentive (LTI) Only employees at senior management level qualify for LTIs.    
Other benefits Company car, travel allowances, pension and provident fund, and medical aid.    

Reduction or forfeiture of share scheme awards (malus and clawback)

Share scheme awards are subject to reduction or forfeiture (in whole or in part) if:

  • There is reasonable evidence of fraud or material error by a participant; or
  • The financial performance of the Group or the relevant business unit for any financial year in respect of which an award is based have subsequently appeared to be materially inaccurate; or
  • The Group or the relevant business unit suffers a material downturn in its financial performance, for which the participant can be held responsible; or
  • Resignation or dismissal on grounds of misconduct, poor performance or proven dishonest or fraudulent conduct (whether such cessation occurs as a result of notice given by the employee or otherwise or if he/she resigns to avoid dismissal on grounds of misconduct, poor performance or proven dishonest or fraudulent conduct) before the vesting date, all share appreciation rights, conditional awards and all matching awards will lapse, unless RemCo determines otherwise.

Vesting of any awards may be postponed while there is an ongoing investigation or other procedure underway, to determine whether the forfeiture provisions apply in respect of a participant, or if further investigation is warranted.

Retirement, retrenchment, death, ill health, disability or other reasons for cessation of employment

If a participant ceases to be an employee due to retirement at normal retirement age, the unvested Share Appreciation Rights (SARs) and Conditional Share Plans (CSPs) will remain subject to the performance criteria and will vest on the normal vesting date.

If a participant ceases to be an employee due to retrenchment, death, ill health, disability, or reasons other than resignation or dismissal, the board will by written notice to the participant or the executor of the deceased estate permit a pro rata portion of the unvested SARs and CSPs to vest on the date of cessation of employment.

The pro rata portion of the SARs and CSPs that vest will, unless the board determines otherwise, reflect the number of months served since the date of grant and the extent to which the performance conditions have been satisfied. The balance of the unvested shares not permitted to be exercised or matched will lapse.

Treasury shares to hedge against share scheme obligations

The Group buys back shares to limit its exposure to deliver shares in terms of share-based LTI schemes. These shares are held in treasury for that purpose.

Retirement schemes

Executives participate in contributory retirement schemes, which include pension and provident funds. Executive retirement is governed by their retirement scheme rules, subject to the Group's need to enter into fixed-term contracts to extend the services of any executive within certain prescribed limits.

NomCo governs the succession policy and plans, external appointments and directors' service contracts covered below. These items are included in the report as both the NomCo and RemCo are relevant decision-makers on these matters.

External appointments

Executives are not permitted to hold external directorships or offices without the approval of the board.

Directors' service contracts

Directors' contracts can be terminated by providing between three- and six-months' notice.

Directors' appointments are made in terms of the company's MOI and are initially confirmed at the first AGM of shareholders following their appointment, and thereafter by rotation.

Minimum shareholding requirements (MSR)

To ensure alignment between executives and shareholders, and on the recommendation of management, the Group adopted an MSR for executive directors and prescribed officers.

Each executive's MSR target is determined using the executive's TGP after tax. The target must be achieved within five years from 1 July 2019 (or from the joining date for new appointees), unless otherwise determined by RemCo considering market conditions and related factors. It is not the intention of the scheme to compel executives to incur debt to acquire Motus shares but rather that executives should retain shares acquired through the operation of share incentive schemes up to the MSR target.

Compliance with the MSR will be measured annually and executives subject to MSR will have to declare the extent of their personal shareholdings in the company at each year-end or as and when directed by the company. RemCo will assess compliance with the MSR before making future discretionary LTI awards.

MSR targets are set as follows:

MSR target   Required
achievement
date
  MSR
achievement
CEO 1,5 times post-tax
annual fixed remuneration
  30 June 2024   Achieved
in 2019
CFO 1,25 times post tax
annual fixed remuneration
  30 June 2024   Achieved
in 2019
Executive directors and prescribed officers 1 times post-tax
annual fixed remuneration
  Kerry Cassel   30 June 2024   On track to
achieve target
  Niall Lynch   30 June 2024   Achieved
in 2019
  Corné Venter   30 June 2024   On track to achieve target
  Ntando Simelane   30 June 2026   Employed
April 2021

Non-executive directors' fees

RemCo reviews and recommends to the board the fees payable to non-executive directors. The board in turn makes recommendations to shareholders after considering the fees paid by comparable companies, responsibilities of the non-executive directors and considerations relating to the retention and attraction of high-calibre individuals. RemCo has decided to maintain a structure where directors' fees are not split between membership and attendance fees. We believe that the efforts and contribution of non-executive directors go well beyond their attendance at formal board or sub-committee meetings, and the Group has not had significant instances of non-attendance of meetings.

Executive directors, prescribed officers and senior business executives (executives)

Executives are responsible for leading others and making significant decisions about the short- and long-term operation of the business, its assets, funders and employees. They require specific skills and experience and are held to a higher level of accountability.

Elements of executive remuneration

Executive remuneration comprises the following:

Number icon Total guaranteed pay

Number icon Short-term incentive (STI) (annual)

Number icon Long-term incentive (LTI) through the share scheme.

RemCo seeks to ensure an appropriate balance between the fixed and performance-related elements of executive remuneration, and between those aspects of the package linked to short-term performance and those linked to longer-term shareholder value creation.

The Group's general philosophy for executive remuneration is that the performance-based pay of executives and senior managers should form a significant portion of their expected total compensation. There should also be an appropriate balance between rewarding operational performance (through annual incentives) and rewarding long-term sustainable performance (through long-term share-based incentives). Since Motus operates in the Retail sector, STIs are critical to incentivise divisional CEOs and senior team members to achieve annual targets.

Total guaranteed pay (TGP)

TGP is fixed remuneration including benefits but excluding STIs. The TGP of each executive is based on roles in similar companies, which are comparable in terms of size, market sector, business complexity and international scope. When determining fixed remuneration, the factors relating to divisional performance, individual performance and changes in responsibilities are considered.

Executives are entitled to vehicle benefits, pension and/or provident fund contributions, medical insurance, and death and disability insurance. These benefits are considered to be market competitive for executives.

Short-term incentive (STI)

All executives are eligible to receive a performance related STI. The incentive is non-contractual and not pensionable. RemCo reviews incentives annually and determines the level of each incentive payment based on performance criteria set at the beginning of the performance period.

RemCo sets the minimum performance targets at which annual STIs become payable and the targets at which the maximum incentive is paid. STIs are capped at maximum levels as a percentage of TGP. RemCo has the discretion authority to adjust payments (up or down) in exceptional circumstances.

  Maximum STI
as % of TGP
CEO and CFO 150
Executive director 100
Other participants 30 to 100

The annual STI criteria for executive directors and prescribed officers include the following and are adjusted annually.

Annual STI criteria for the 2022 financial year

The CEO and CFO's 2022 STI criteria will include:

    Maximum STI
as % of TGP
Achieve targeted Group operating profit 35
Achieve targeted Group PBT 35
Achieve targeted average debt to EBITDA 30
Strategy execution 15
  Expand multi-franchising and dealership footprint
  Investment in IT and innovation
  Strategic acquisitions
Achieve ESG targets 25
  Environmental: achieve fuel, electricity and water targets. Invest in projects such as solar panels, electricity-saving equipment and water recycling on all new and refurbished buildings
  Social: achieve employment equity targets for top, senior and middle management
  Governance: implement all the legislation changes impacting the business
Individual performance: this component enables RemCo to set individual performance targets and assess these in circumstances that could not be foreseen at the start of the period or are not in the control of a particular executive 10
Maximum as percentage of TGP 150

The 2022 STI criteria for the executive director will include:

  Maximum STI
as % of TGP
Achieve Group operating profit target 25
Achieve Divisional PBT target 35
Strategy execution 10
  Successful execution of internal IT projects and innovation
  Expansion of technology product offerings
Achieve ESG targets 20
  Environmental: achieve fuel, electricity and water targets
  Social: achieve employment equity targets for senior, middle and junior management
  Governance: implement all the legislation changes impacting the business and prepare the business for new legislation
Individual performance: this component enables RemCo to set individual performance targets and assess these in circumstances that could not be foreseen at the start of the period or are not in the control of a particular executive 10
Maximum as percentage of TGP 100

The 2022 STI criteria for the prescribed officers will include:

  Maximum STI
as % of TGP
Achieve Group operating profit target 15
Achieve Divisional operating profit target 30
Achieve cash management target 10
Achieve ESG targets 25
  Environmental: achieve fuel, electricity and water targets. Invest in projects such as solar panels, electricity-saving equipment and water recycling on all new and refurbished buildings
  Social: achieve employment equity targets for top, senior and middle management
  Governance: implement all the legislation changes impacting the business
Market share/specific projects/strategy execution 10
Individual performance: this component enables RemCo to set individual performance targets and assess these in circumstances that could not be foreseen at the start of the period or are not in the control of a particular executive 10
Maximum as percentage of TGP 100

The 2022 STI criteria for the Company Secretary will include:

    Maximum STI
as % of TGP
Achieve targeted Group operating profit 16
Achieve ESG targets 16
  Environmental: achieve fuel, electricity and water targets. Invest in projects such as solar panels, electricity-saving equipment and water recycling on all new and refurbished buildings
  Social: achieve employment equity targets for top, senior and middle management
  Governance: implement all the legislation changes impacting the business
Specific projects (legal and governance projects) 26
Individual performance: this component enables RemCo to set individual performance targets and assess these in circumstances that could not be foreseen at the start of the period or are not in the control of a particular executive 7
Maximum as percentage of TGP 65
Long-term incentive (LTI) schemes

Executive participation in LTI and retention schemes is based on criteria such as seniority, performance during the year, and other retention drivers. Any senior employee with significant managerial or other responsibility, including any director holding salaried employment or office in the Group, is eligible to participate in LTI schemes. Non-executive directors may not be awarded rights in any of the incentive schemes.

Since 1 July 2020, the Group only uses the CSP as an LTI scheme. The SARs scheme and Deferred Bonus Plan (DBP) were previously used and shares were allocated under these schemes, but these have been discontinued.

The quantum of CSPs allocated are calculated using a model developed by PwC, and is determined using the expected value of an allocation expressed as a percentage of TGP. The percentage allocated is determined based on retention considerations and the job grading of the participant.

Benchmark awards for CSPs Maximum LTI
award
as % of TGP
CEO and CFO 100
Executive director and prescribed officers 35 to 75
Other participants 30 to 50

The CSPs were issued at R91,82 per share and will vest in September 2024 or September 2025.

The value of long-term share-based incentives is determined in the financial year of allocation using the binomial tree valuation methodology. This is based on several assumptions, which include the original award price, the expected rate of share price growth and the expected fulfilment of related performance conditions. The eventual gains from long-term share-based incentives will vary from year to year depending on vesting and exercise patterns, as well as the impact on share price performance and external factors such as market sentiment, interest rates and exchange rates.

Conditional share plan (CSP)

Employees receive grants of conditional awards and vesting is subject to performance conditions, as set out below. The performance conditions for the CSPs are based on performance targets set by RemCo at the time of issue.

% of CSP
awards
Growth in HEPS relative to the growth in HEPS of a selected peer group of JSE-listed companies 25
ROIC in excess of WACC plus 1%* 25
Achieve cash flow target 25
Individual performance 25
* Previously ROIC equal to WACC.

The extent to which each performance condition has been met is determined on the vesting date as follows:

HEPS growth over the performance period % of CSP
awards
If the HEPS growth of the company is below the lower quartile of the peer group 0
If the HEPS growth of the company is equal to the lower quartile of the peer group 30
If the HEPS growth of the company is equal to or above the upper quartile of the peer group 100

Linear vesting occurs between the 30% and 100% range, depending on the company's performance relative to the peer group if HEPS growth falls in the second or third quartile.

ROIC % of CSP
awards
If the average ROIC of the company over the performance period is lower than the average WACC plus 1% of the company over the performance period 0
If the average ROIC of the company over the performance period is equal to the average WACC plus 1% of the company over the performance period 50
If the average ROIC of the company over the performance period is in excess of 2% of WACC 100

Linear vesting occurs between the 50% and 100% range.

Cash flow target % of CSP
awards
Average debt: EBITDA < 2,35 times 25
Individual performance % of CSP
awards
This component enables RemCo to set individual performance targets and assess these in circumstances that could not be foreseen at the start of the period or are not in the control of a particular executive. 25

Remuneration policy

Section 4:
Implementation of remuneration policy

Historical Imperial Holdings share schemes

Motus employees who had been awarded rights in Imperial Holdings share schemes prior to the listing of Motus on the JSE continue to participate in those schemes. Upon exercise, their SARs will be settled by Motus in Motus shares. A total of 1 383 865 SARs remain unexercised in terms of the Imperial Holdings SARs scheme at an average price of R167,04 per share.

Motus share scheme allocations

A total of 5 967 649 SARs remain unexercised in terms of the SARs scheme at an average price of R80,13 per share. A total of 240 097 DBPs have been taken up and remain unvested. A total of 3 547 069 CSPs have been allocated and remain unvested.

Annual share scheme allocations

The Group has awarded annual allocations of CSPs during September 2021 according to the allocation benchmarks in the remuneration policy.

The peer group of JSE-listed companies was selected based on an independent report prepared by PwC and considers comparative metrics including revenue, number of employees, industry and complexity.

Current peer group Sector
AVI Limited Consumer goods
Barloworld Limited Industrials
Bidvest Limited Industrials
Clicks Group Limited Consumer services
CMH Group Limited Consumer services
TFG Limited Consumer services
KAP Industrial Holdings Limited Industrials
Massmart Holdings Limited Consumer services
Mr Price Group Limited Consumer services
Pick n Pay Stores Limited Consumer services
RCL Foods Limited Consumer services
Super Group Limited Industrials
The Spar Group Limited Consumer services
Tiger Brands Limited Consumer goods
Truworths International Limited Consumer services
Woolworths Holdings Limited Consumer services

Proposed non-executive directors' fees for 2022 and 2023

At the AGM to be held on 3 November 2021, shareholders will be asked to approve the following non-executive directors' remuneration by special resolution in terms of section 66(9) of the Companies Act, granting authority to pay fees for services as directors, which will be valid with effect from the date of the AGM until 30 June 2023.

The approved fees for the 2021 financial year were reduced to reflect no increase from the prior year, as well as a reduction of 15% for three months from 1 July  2020. The proposed increase in fees for the 2022 and 2023 financial years is 5% for the board and all its sub-committees.

The table below provides a breakdown per committee for the year ended 30 June 2021, as well as proposed fees for the years ended 30 June 2022 and 30 June 2023:

Actual
fee from
1 July 2020 to
30 June 2021
Proposed
fee from
1 July 2021 to
30 June 2022
Proposed
fee from
1 July 2022 to
30 June 2023
Chairman* R1 003 551 R1 053 730 R1 106 420
Deputy Chairman* R501 775 R526 870 R553 215
Board member R287 018 R301 340 R316 410
Assets and Liabilities committee Chairman* R182 923 R192 069 R201 675
Assets and Liabilities committee member R121 780 R127 870 R134 265
Audit and Risk committee Chairman* R378 984 R397 940 R417 840
Audit and Risk committee member R189 492 R198 970 R208 920
Remuneration committee Chairman* R136 940 R143 790 R150 980
Remuneration committee member R90 956 R95 510 R100 285
Nomination committee Chairman* R102 705 R107 840 R113 230
Nomination committee member R68 217 R71 628 R75 210
Social, Ethics and Sustainability Chairman* R183 428 R192 600 R202 230
Social, Ethics and Sustainability member R121 780 R127 870 R134 265
*  Fee paid in addition to a member's fee.

In determining the proposed fees, cognisance was taken of market trends and the additional responsibilities of non-executive directors in terms of increased legal and governance requirements.

Executive directors receive no directors' or committee fees for their services as directors in addition to their normal remuneration as employees.

Non-executive directors' fees for 2021

The table below provides an analysis of the emoluments paid to non-executive directors for the year to 30 June 2021:

Directors' 
fees 
R'000 
Sub-committee
  fees
  R'000 
COVID-19 
salary 
sacrifice 
R'000 
2021
  Total
  R'000
2020
  Total
  R'000
Non-executive directors 
GW Dempster  1 341  591  (75) 1 857  1 914 
PJS Crouse1  186  64  –  250  – 
NB Duker2  186  99  –  285  – 
P Langeni3  112  47  (18) 141  518 
S Mayet  298  717  (38) 977  977 
KR Moloko4  298  323  (23) 598  598 
MJN Njeke5  298  760  (35) 1 023  854 
A Tugendhaft  820  435  (48) 1 207  1 229 
Total  3 539  3 036  (237) 6 338  6 090 
1  Appointed to the board and ALCO on 10 November 2020.
2  Appointed to the board and ARC on 10 November 2020.
3  Resigned from the board, NomCo and RemCo on 10 November 2020.
4  Resigned from the board, ARC and SES committee on 31 May 2021.
5  Appointed to NomCo and RemCo on 15 September 2020.

Executive remuneration

The executive directors and prescribed officers' remuneration include the TGP, STI, LTI.

Red icon Osman Arbee – Group CEO

2021 Remuneration
Cash
component
R’000
Retirement
and medical
contributions
R’000
Other
benefits
R’000
STI bonus
R’000
Total cash
remuneration
R’000
Gains on
exercise of
LTI awards
R’000
2021
Total taxable
remuneration
realised
R’000
2020
Total taxable
remuneration
realised
R’000
9 745 469 386 16 139 26 739 4 682 31 421 25 997
TGP

Osman's TGP was reduced by 20% for the three months to 30 September 2020 due to the COVID–19 crisis (R556 500) and no inflationary increase was awarded for the financial year. His TGP is R10 600 000 (2020: R10 600 000). The remuneration for this position was externally benchmarked during the year against companies with a similar size, complexity and geographic spread.

STI

Based on the computation (set out below) according to STI criteria set during July 2020, Osman achieved 96% of the criteria. An annual incentive of R16 138 500 was paid (2020: R8 347 500).

LTI

The two criteria for the 2017 LTIs were investment in an equal number of company shares to the DBP shares awarded and continued employment with the Group until the vesting date.

Based on the LTI criteria set during July 2017, Osman achieved 100% of the DBP criteria resulting in the vesting of LTI awards amounting to R4 682 000.

Annual allocation of CSPs in line with LTI award benchmarks for executive directors to a value of R11 690 000 (2020: R11 130 000) were awarded in September 2021. The CSPs are subject to performance criteria set out above and will vest in 2024.

Red iconOckert Janse van Rensburg – Group CFO

2021 Remuneration
Cash
component
R’000
Retirement
and medical
contributions
R’000
Other
benefits
R’000
STI bonus
R’000
Total cash
remuneration
R’000
Gains on
exercise of
LTI awards
R’000
2021
Total taxable
remuneration
realised
R’000
2020
Total taxable
remuneration
realised
R’000
5 027 411 170 8 410 14 018 859 14 877 10 666
TGP

Ockert’s TGP was reduced by 15% for the three months to 30 September 2020 due to the COVID-19 crisis (R217 500) and no inflationary increase was awarded for the financial year. His TGP is R5 608 000 (2020: R5 608 000). The remuneration for this position was externally benchmarked during the year against companies with a similar size, complexity and geographic spread.

STI

Based on the computation (set out below) according to STI criteria set during July 2020, Ockert achieved 96% of the criteria. An annual incentive of R8 410 000 was paid (2020: R4 350 000).

LTI

The two criteria for the 2017 LTIs were investment in an equal number of company shares to the DBP shares awarded and continued employment with the Group until the vesting date.

The two criteria for the 2017 SARs LTIs were the achievement of ROIC growth greater than WACC, and HEPS growth in relation to the listed companies of the peer group.

Based on the LTI criteria set during July 2017, Ockert achieved 100% of the DBP criteria and 23% of the SARs criteria resulting in the vesting and exercise of LTI awards amounting to R859 000.

Annual allocation of CSPs in line with LTI award benchmarks for executive directors to a value of R6 250 000 (2020: R5 800 000) were awarded in September 2021. The CSPs are subject to performance criteria set out above and will vest in 2024.

STI computation for 2021 financial year for the CEO and CFO:
Maximum STI
as % of TGP
Achievement:
Osman Arbee
Achievement:
Ockert JV
Rensburg
Note
Achieving Group operating profit more than R2 800 million (2020: R2 100 million) 30 30 30
Achieving Group PBT in excess of R1 700 million (2020: R864 million) 30 30 30
Achieving Group cash management target: average net debt to EBITDA <2,2 times
Strategy execution 25 20 20 Note 1
  – Cost-cutting
  – Bank covenants compliance
  – Restructuring the business for the 'new normal'
  Transformation 20 20 20 Note 2
  – Enhance transformation and diversity across all operations
  – Improve race representation
  – Implement a strategy to attract, develop and retain talent
Individual performance 15 15 15 Note 3
Maximum as percentage of TGP 150 145 145

Notes to the STI computation:

  1. Strategy execution
    • Total operating expenses were reduced by 3,1% for the year as a result of a number of cost containment initiatives, despite unavoidable inflationary increases for certain costs.
    • Bank covenants: bank borrowings were well-maintained and we complied with bank covenant levels with sufficient headroom. Net debt to EBITDA at 0,8 times (required to be less than 3 times) and EBITDA to net interest at 10,9 times (required to be greater than 3 times).
    • Restructuring the business for the new normal: significant actions were taken in the car rental and retail businesses in South Africa, including the multi-franchising of dealerships. The businesses in the UK and Australia were restructured.

    Osman and Ockert were allocated 20% out of the 25% for this criteria.

  2. Transformation
    • Enhance transformation and diversity across all operations: Motus is on a diversity, equity and inclusion journey, and is making progress. Various black professionals were appointed into senior positions during the year including to the Group executive committee, with key senior and middle management positions across various businesses earmarked for black professionals in the medium term to support transformation at senior management levels.
    • Improve race representation:
      Black
      Prior year % Actual %
      Top management 30 36
      Senior management 40 53
      Middle management 46 47
      Total South African employee base 73 73
  3. Individual performance

The CEO and CFO exceeded individual performance expectations in managing the business in a challenging economic environment during the COVID-19 crisis. They were awarded their 15% allocation.

Red iconKerry Cassel – CEO: Financial Services and executive director

2021 Remuneration
Cash
component
R’000
Retirement
and medical
contributions
R’000
Other
benefits
R’000
STI bonus
R’000
Total cash
remuneration
R’000
Gains on
exercise of
LTI awards
R’000
2021
Total taxable
remuneration
realised
R’000
2020
Total taxable
remuneration
realised
R’000
4 068 389 210 4 900 9 567 391 9 958 7 709
TGP

Kerry's TGP was reduced by 15% for the three months to 30 September 2020 due to the COVID-19 crisis (R183 837) and there was no inflationary increase awarded in the financial year. Her TGP is R4 667 000 (2020: R4 709 000). The remuneration for this position was externally benchmarked during the year against companies with a similar size, complexity and geographic spread.

STI

Based on the computation (set out below) according to STI criteria set during July 2020, Kerry achieved 100% of the set criteria. An annual incentive of R4 900 000 was paid (2020: R3 000 000).

LTI

The two criteria for the 2017 SARs LTIs were the achievement of ROIC growth greater than WACC and HEPS growth in relation to the listed companies of the peer group.

Based on the LTI criteria set during July 2017, Kerry achieved 23% of the SARs criteria resulting in the vesting and exercise of LTI awards amounting to R391 000.

Annual allocation of CSPs in line with LTI award benchmarks for executive directors to a value of R3 862 500 (2020: R3 675 000) were awarded in September 2021. The CSPs are subject to performance criteria set out above and will vest in 2024.

STI computation for the 2021 financial year for the executive director:
Maximum
STI as %
of TGP
Achievement Note
Achieving Group operating profit in excess of R2 800 million (2020: R2 100 million) 20 20
Achieved divisional PBT in excess of 105% of target 30 30 Note 1
Transformation 20 20 Note 2
  Enhance transformation and diversity across all operations
  Growth in black senior, middle and junior management, B-BBEE scorecard, succession and talent management.
  Implement a strategy to attract, develop and retain talent.
Project specific tasks (innovation, POPIA legislation preparation and IT projects) 20 20 Note 3
Individual performance 10 10 Note 4
Maximum as percentage of TGP 100 100

Notes to the STI computation:

  1. Divisional profits
    • Achieved in excess of 105% of target set in July 2020.
  2. Transformation
    • Growth in black senior, middle and junior management, B-BBEE scorecard, succession and talent management:
      Black
      Prior year % Actual %
      Senior management 23 46
      Middle management 40 47
      Junior management 70 71
  3. Project specific tasks
    • The innovation project, Motus Xponential (mx) innovation, has gained membership of over 3 000 staff members. This project has gained momentum and is effective in all divisions. The new innovation development projects are in progress.
    • AARTO and POPIA legislation: successfully implemented the required POPIA and AARTO processes and controls to ensure compliance with legislation effective 1 July 2021.
    • IT projects: critically reviewed all major IT projects in the Group and re-aligned the projects to ensure costs and timelines are in line with expectations.
  4. Individual performance
    • Kerry exceeded individual performance expectations during the COVID-19 crisis and was awarded a 10% allocation.

Prescribed officer remuneration

Prescribed officers are persons, not being directors, who either alone or with others exercise executive control and management of the whole or a significant portion of the business of the company.

Red iconCorné Venter – CEO: Retail and Rental South Africa

2021 Remuneration
Cash
component
R’000
Retirement
and medical
contributions
R’000
Other
benefits
R’000
STI bonus
R’000
Total cash
remuneration
R’000
Gains on
exercise of
LTI awards
R’000
2021
Total taxable
remuneration
realised
R’000
2020
Total taxable
remuneration
realised
R’000
3 432 453 263 3 957 8 105 636 8 741 6 277
TGP

Corné's TGP was reduced by 15% for the three months to 30 September 2020 due to the COVID-19 crisis (R161 248), with no increase for the financial year. His TGP is R4 148 000 (2020: R4 127 000). The remuneration for this position was externally benchmarked during the year against companies with a similar size, complexity and geographic spread.

STI

Based on the computation (set out below) according to STI criteria set during July 2020, Corné achieved 92% of the set criteria. An annual incentive of R3 957 000 was paid (2020: R2 150 000).

LTI

The two criteria for the 2017 LTIs were investment in an equal number of company shares to the DBP shares awarded and continued employment with the Group until the vesting date.

The two criteria for the 2017 SARs LTIs were the achievement of ROIC growth greater than WACC and HEPS growth in relation to the listed companies of the peer group.

Based on the LTI criteria set during July 2017, Corné achieved 100% of the DBP criteria and 23% of the SARs criteria resulting in the vesting and exercise of LTI awards amounting to R636 000.

Annual allocation of CSPs in line with LTI award benchmarks for an executive committee member and business unit leader to a value of R3 248 000 (2020: R2 150 000) were awarded in September 2021. The CSPs are subject to performance criteria set out above and will vest in 2024 or 2025.

Red iconNiall Lynch – CEO: Hyundai South Africa

2021 Remuneration
Cash
component
R’000
Retirement
and medical
contributions
R’000
Other
benefits
R’000
STI bonus
R’000
Total cash
remuneration
R’000
Gains on
exercise of
LTI awards
R’000
2021
Total taxable
remuneration
realised
R’000
2020
Total taxable
remuneration
realised
R’000
2 868 421 255 3 800 7 344 553 7 897 6 503
TGP

Niall's TGP was reduced by 15% for the three months to 30 September 2020 due to the COVID-19 crisis (R133 125) and no inflationary increase was awarded in the financial year. His TGP is R3 544 000 (2020: R3 419 000). The remuneration for this position was externally benchmarked during the year against companies with a similar size, complexity and geographic spread.

STI

Based on the computation (set out below) according to STI criteria set during July 2020, see the STI computation below. Niall achieved 100% of the set criteria. An annual incentive of R3 800 000 was paid (2020: R2 500 000).

LTI

The two criteria for the 2017 LTIs were investment in an equal number of company shares to the DBP shares awarded and continued employment with the Group until the vesting date.

The two criteria for the 2017 SARs LTIs were the achievement of ROIC growth greater than WACC and HEPS growth in relation to the listed companies of the peer group.

Based on the LTI criteria set during July 2017, Niall achieved 100% of the DBP criteria and 23% of the SARs criteria resulting in the vesting and exercise of LTI awards amounting to R553 000.

Annual allocation of CSPs in line with LTI award benchmarks for an executive committee member and business unit leader to a value of R2 800 000 (2020: R1 775 000) were awarded in September 2021. The CSPs are subject to performance criteria set out above and will vest in 2024 or 2025.

STI computation for the 2021 financial year for the prescribed officers:
Maximum STI
as % of TGP
Achievement:
Corné Venter
Achievement:
Niall Lynch
Note
Achieving Group operating profit in excess of R2 800 million (2020: R2 100 million) 15 15 15
Achieving divisional PBT target 30 30 30 Note 1
Achieving divisional working capital and cash generation targets 15 15 15 Note 2
Transformation 20 12 20 Note 3
  Enhance transformation and diversity across all operations
  Implement a strategy to attract, develop and retain talent
  Growth in black senior, middle and junior management, B-BBEE scorecard, succession and talent management
Market share/specific projects 10 10 10 Note 4
Individual performance 10 10 10 Note 5
Maximum as percentage of TGP 100 92 100

Notes to the STI computation:

  1. Divisional operating profit target
    • Corné and Niall achieved the full 30% for these criteria.
  2. Divisional working capital target and cash generation targets
    • Corné and Niall achieved targeted inventory levels and cash flow targets.
  3. Transformation
    • Growth in black senior, middle and junior management, B-BBEE scorecard, succession and talent management:
        Black
      Retail and Rental: South Africa Prior year % Actual %
      Senior management 50 50
      Middle management 43 43
      Junior management 62 63

      Corné partly achieved his targets and scored 12% out of 20&. The transformation targets were not exceeded as there were a significant number of retrenchments.

        Black
      Hyundai South Africa Prior year % Actual %
      Senior management 31 50
      Middle management 46 50
      Junior management 60 69

      Niall achieved 100% of the employment equity targets.

  4. Market share/specific projects
    • Corné: various actions were taken in the car rental and retail business, including the multi-franchising of dealerships.
    • Niall: grew Hyundai market share to in excess of 7% (from 6,6%).
    • Corné and Niall were awarded 10% of their award for this performance criteria.
  5. Individual performance
    • Corné and Niall exceeded individual performance expectations during the COVID-19 crisis and were awarded their 10% allocations.

Red icon Ntando Simelane – Company Secretary and Head of Legal Counsel

2021 Remuneration
Cash
component
R’000
Retirement
and medical
contributions
R’000
Other
benefits
R’000
STI bonus
R’000
Total cash
remuneration
R’000
Gains on
exercise of
LTI awards
R’000
2021
Total taxable
remuneration
realised
R’000
683 66 1 1 000 1 750 1 750
TGP

Ntando was appointed on 1 April 2021. His annualised TGP amount is R3 000 000. The remuneration for this position was externally benchmarked during the year against companies with a similar size, complexity and geographic spread.

STI

In terms of Ntando's recruitment contract a pre-determined annual incentive of R1 000 000 was paid.

LTI

Annual allocation of CSPs in line with LTI award benchmarks for an executive committee member, legal counsel and Company Secretary to a value of R1 050 000 were awarded in September 2021. The CSPs are subject to performance criteria set out above and will vest in 2024.

Red icon Janine Jefferies – Company Secretary and Head of Legal Counsel

2021 Remuneration
Cash
component
R’000
Retirement
and medical
contributions
R’000
Other
benefits
R’000
STI bonus
R’000
Total cash
remuneration
R’000
Gains on
exercise of
LTI awards
R’000
2021
Total taxable
remuneration
realised
R’000
2020
Total taxable
remuneration
realised
R’000
782 70 83 935 935 2 913
TGP

Janine's TGP was reduced by 10% for the three months to 30 September 2020 due to the COVID–19 crisis (R55 000) and no inflationary increase was awarded in the financial year. Her annualised TGP amount is R2 198 000 (2020: R2 198 000). The remuneration for this position was externally benchmarked during the year against companies with a similar size, complexity and geographic spread.

STI

Janine resigned on 28 February 2021 and as a result no STI was paid.