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

I would like to thank Mr. GW Dempster and Mr. A Tugendhaft, for their insightful contribution that allows RemCo to perform its duties effectively and efficiently.

Background statement

RemCo welcome and consider the views of shareholders in our deliberations, which begins with ensuring that our disclosures relating to executive remuneration is transparent. We are careful not to depart from the expectations set by the performance criteria, even when factors outside our control stifle or enhance performance. We believe the remuneration policies in place appropriately incentivise 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 2021 AGM, 98% of shareholders voted in favour of both the Group's remuneration policy and of its implementation. As a result of our ongoing interactions with shareholders, we continuously implement changes, which relate to the remuneration policy and enhance the disclosures in the implementation report.

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. A detailed benchmarking exercise was performed in the prior year. The review included: total guaranteed pay (TGP), short-term incentives (STIs), long-term incentives (LTIs), key performance criteria and 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 have approved the following, which is consistent with prior years:

• 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.

Shareholder engagement and changes to remuneration policy and disclosure

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 2 November 2022. 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 2022 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.

The committee will continue to provide guidance to the board on director and prescribed officer remuneration, and ensure that the remuneration policy and its implementation are in line with the Group's remuneration philosophy.

JJ Njeke
RemCo Chairman

26 September 2022

Remuneration Committee

Committee Chairman

The committee is chaired by Mr. MJN Njeke, an independent non-executive director. Mr. MJN Njeke, was appointed as Chairman of RemCo from 3 November 2021, when Mr. A Tugendhaft stepped down as Chairman while remaining a member of RemCo.

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.

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: MJN Njeke1	4/4
Members:
GW Dempster	4/4
A Tugendhaft2	4/4

1	Appointed as Chairman on 3 November 2021.
2	Resigned as Chairman on 3 November 2021 and remains a member.

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 sustainability, 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 Mobility Solutions business.

Our five strategic pillars include:

The individual’s performance measurement criteria are aligned to the achievement of the Group’s strategies.

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.

	2022		2021
Total number of employees	17 283		16 708
Total compensation paid to employees (Rm)	7 307		6 606

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. 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)		Senior management 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 by 30 June 2023
Niall Lynch		30 June 2024	Achieved in 2019
Corné Venter		30 June 2024	On track to achieve target by 30 June 2023
Ntando Simelane		30 June 2026	On track to achieve target by 30 June 2026

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:

1. Total guaranteed pay
2. Short-term incentive (STI) (annual)
3. 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 related 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 discretionary 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. Criteria are adjusted annually or on an ad hoc basis when individual's responsibilities are amended.

Annual STI criteria for the 2023 financial year

The CEO and CFO’s 2023 STI criteria will include:

		Maximum STI as % of TGP
Achieve targeted Group operating profit		35
Achieve targeted Group operating profit before tax (PBT)		35
Achieve targeted average debt to EBITDA		30
Strategy execution		15
	– Consolidating dealership footprint, including multi-franchising
	– 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 (including gender) for top, senior and middle management; impactful CSI projects in communities
	– Governance: implement all the legislation changes impacting the business
Individual performance:		10
	– 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
Maximum as a percentage of TGP		150

The 2023 STI criteria for the executive director will include:

		Maximum STI as % of TGP
Achieve targeted Group operating profit		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 (including gender) for senior, middle and junior management; impactful CSI projects in communities
	– Governance: implement all the legislation changes impacting the business and prepare the business for new legislation
Individual performance:		10
	– 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
Maximum as a percentage of TGP		100

The 2023 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 (including gender) for senior, middle and junior management; impactful CSI projects in communities
	– Governance: implement all the legislation changes impacting the business	10
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
Maximum as a percentage of TGP		100

The 2023 STI criteria for the Company Secretary and Head of Legal Counsel 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 (including gender) for senior, middle and junior management; impactful CSI projects in communities – Governance: implement all the legislation changes impacting the business
Specifi c projects (legal and governance projects)		26
Individual performance:		7
	– 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
Maximum as a percentage of TGP		65

Long-term (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, these schemes have been discontinued.

The quantum of CSPs allocated are calculated using a model developed by independent remuneration consultants, 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	75
Other participants	30 to 50

The CSPs were issued at R109,74 per share and will vest in 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 3%*	25
Achieve cash flow target	25
Individual performance	25

* Previously ROIC in excess of WACC plus 1%.

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 or in excess of 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 equal to or in excess of 3% 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

Share scheme allocations

A total of 4 165 918 SARs remain unexercised in terms of the SARs scheme at an average price of R76,12 per share. A total of 4 221 217 CSPs have been allocated and remain unvested.

Annual share scheme allocations

The Group has awarded annual allocations of CSPs during September 2022 according to the allocation benchmarks in the remuneration policy.

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

Current peer group	Sector
Barloworld Limited	Industrials
Bidvest Limited	Industrials
Clicks Group Limited	Consumer services
Combined Motor Holdings Limited	Consumer services
KAP Industrial Holdings Limited	Industrials
Massmart Holdings Limited	Consumer services
Mr Price Group Limited	Consumer services
Multichoice Group Limited	Consumer services
Pepkor Holdings Limited	Consumer goods
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
Woolworths Holdings Limited	Consumer services

 

Proposed non-executive directors' fees for 2023 and 2024

At the AGM to be held on 2 November 2022, 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 2024.

The proposed increase in fees for the 2023 financial year is 5% and the 2024 financial year is 6% for the board and all its sub-committees.

The table below provides a breakdown per committee for the year ended 30 June 2022, as well as proposed fees for the years ended 30 June 2023 and 30 June 2024:

	Actual fee from 1 July 2021 to 30 June 2022		Proposed fee from 1 July 2022 to 30 June 2023		Proposed fee from 1 July 2023 to 30 June 2024
Chairman*	R1 053 730		R1 106 420		R1 172 805
Deputy Chairman*	R526 870		R553 215		R586 408
Board member	R301 340		R316 410		R335 395
Asset and Liability Committee Chairman*	R192 069		R201 675		R213 776
Asset and Liability Committee member	R127 870		R134 265		R142 321
Audit and Risk Committee Chairman*	R397 940		R417 840		R442 910
Audit and Risk Committee member	R198 970		R208 920		R221 455
Remuneration Committee Chairman*	R143 790		R150 980		R160 039
Remuneration Committee member	R95 510		R100 285		R106 302
Nomination Committee Chairman*	R107 840		R113 230		R120 024
Nomination Committee member	R71 628		R75 210		R79 723
Social, Ethics and Sustainability Committee Chairman*	R192 600		R202 230		R214 364
Social, Ethics and Sustainability Committee member	R127 870		R134 265		R142 321

* 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 2022

The table below provides an analysis of the emoluments paid to non-executive directors for the year to 30 June 2022:

Non-executive directors	Directors’ fees R’000		Subcommittee fees R’000		2022 Total R’000		2021 Total R’000
GW Dempster	1 356		595		1 951		1 857
PJS Crouse	301		128		429		250
NB Duker	301		199		500		285
P Langeni1	–		–		–		141
S Mayet	301		725		1 026		977
KR Moloko2	–		–		–		598
MJN Njeke3	301		633		934		1 023
F Roji4	251		272		523		–
A Tugendhaft5	829		343		1 172		1 207
Total	3 640		2 895		6 535		6 338

1	Resigned from the board, NomCo and RemCo on 10 November 2020.
2	Resigned from the board, ARC and SES Committee on 31 May 2021.
3	Appointed to NomCo and RemCo on 15 September 2020. Resigned as a member of ALCO on 1 August 2021 and as a member of ARC on 1 September 2021. Appointed as the Chairman of RemCo on 3 November 2021.
4	Appointed to the board, ARC and SES on 1 September 2021.
5	Resigned as Chairman of RemCo on 3 November 2021 and remains a member.

Executive remuneration

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