Adcock Ingram Integrated Report 2018

This section provides an overview of the Group’s approach to remuneration with particular focus on management and non-executive directors. The environment against which this report is set, continuously evolves, driven by macro- and socio-economic factors, regulations and practical considerations. Remuneration This report is presented by the Company’s Human Resources, Remuneration and Nominations Committee (Committee), appointed by the Board, which should ensure that the Company’s remuneration aligns to the achievement of its strategic objectives and positive results in the short-, medium- and long-term. COMMITTEE COMPOSITION OF THE COMMITTEE The Committee consists of three (3) independent non-executive directors. Three (3) scheduled meetings are held per year and when necessary, special meetings are held. The Chief Executive Officer and Executive Director: Human Capital and Transformation are permanent invitees at Committee meetings and are recused when matters pertaining to their own remuneration are discussed. Meeting attendance Chairman P Makwana 5/5 Members L Boyce 4/5 C Raphiri 5/5 M Sacks* 2/2 Invitees A Hall 5/5 B Letsoalo 5/5 * See changes to the Board on page 9. The following terms shall bear the meanings ascribed to each when used in the report: u u Executive management consists of the Executive Directors; u u Senior management consists of the Executive Committee members, excluding the Executive Directors u u Management consists of both the executive management and the senior management BACKGROUND STATEMENT In line with King IV, the Committee hereby discloses the Company’s governance of remuneration in this report. The Board, through the Committee, is responsible for the governance of remuneration by setting the direction for how remuneration is approached and addressed in the Company. It also approves the policy that articulates and gives effect to its direction on fair, responsible and transparent remuneration in accordance with the principles of King IV. The remuneration policy and the implementation report are subject to an annual non-binding shareholder advisory vote at the Annual General Meeting (AGM) whilst the remuneration payable to non-executive directors are subject to at least 75% support by shareholders. REMUNERATION REPORT This section comprises the following sections: Voting results at the previous AGM were as follows: u u 65.11% in favour of the remuneration policy; u u 66.38% in favour of the implementation report; and u u 95.77% of shareholders voted in favour of the remuneration payable to non-executive directors. Issues raised by shareholders regarding the remuneration policy and the implementation report are as follows: Shareholder concerns Management response The current Long-term incentive (LTI) scheme does not have performance conditions attached to it to incentivise key employees. A new Performance Based LTI Scheme (PBLTIS) has been developed and incorporates the following: u u financial and non-financial performance targets to support the business strategy u u the scheme will operate as a full value shares scheme u u the shares will be allocated to key management in critical roles u u based upon levels of achievement against the performance metrics over three years, the awards will vest as follows: − − 75% of the awards vest after three years − − 25% of the awards vest after four years The proposed scheme will be presented to shareholders for consideration ahead of the AGM to be held in November 2018, where they will vote on it. Non-disclosure of the Short-term Incentive (STI) metrics and achievement levels The Company has agreed to report retrospectively on STI performance measures, e.g. Trading Profit, ROFE, etc. and will state whether targets were achieved or not. An implementation report, including remuneration paid to the individual Board members and Executive Directors Background statement Activities undertaken by the Committee during the year An overview of the Group’s remuneration philosophy and policy ADCOCK INGRAM  Integrated Report 2018 50 OUR GOVERNANCE