Adcock Ingram Integrated Report 2018

REMUNERATION FRAMEWORK The employee value proposition (EVP) framework balances financial rewards with non-financial rewards to drive and deliver a high-performance culture. The remuneration component of the EVP framework is made up of two elements, namely guaranteed pay and variable pay as illustrated: REMUNERATION GUARANTEED PAY VARIABLE PAY To attract and retain high calibre talent capable of shaping and executing the business strategy Variable pay consists of short- and long-term incentives with the opportunity to earn financial rewards over periods of between one and five years. BASIC SALARY BENEFITS STI LTI Reward individual performance measured for a period of up to one year Motivate management and key talent to achieve long-term performance and to enhance retention u u Market related salary tailored to roles and performance u u 13th cheque guaranteed for bargaining unit employees u u TGPs are reviewed annually against market data u u Increases are awarded in December each year to non-bargaining unit employees and in July to bargaining unit members u u The actual percentage increases awarded to non-bargaining unit employees are determined by considering CPI, business performance, market trends and affordability. u u Market competitive suite of benefits offered as part of Total Guaranteed Package, including: u u Provident fund u u Vehicle insurance u u Group life insurance u u Disability cover u u Funeral benefits u u Medical aid u u Employee wellness u u Long service awards u u Learning and development opportunities SALES STAFF For the achievement of sales targets, sales incentives are paid to qualifying sales employees on a quarterly basis. Key senior employees An annual performance incentive paid on the achievement of the following predetermined financial and non-financial targets for the year: Commercial divisions (Over the counter, Prescription, Hospital and Consumer) u u Trading profit (70%weighting; in the case of Managing Directors the weighting is 60%) u u Return on funds employed (ROFE) (30% weighting), only payable if the trading profit target has been achieved u u For Managing Directors an additional performance metric (10% weighting) has been introduced in the past year, based on the individual’s position and includes targets for market share, new business development and factory performance, as examples. Distribution u u Trading profit (40%) u u On time delivery (25%) u u Order infill rate (25%) u u New business development (10%) Corporate u u Trading profit (70% weighting: in the case of Executive Directors the weighting is 60%) u u Return on funds employed (ROFE) (30% weighting), only payable if the trading profit target has been achieved u u For Executive Directors an additional performance metric (10% weighting) has been introduced in the past year and includes targets for transformation and headline earnings per share. SCHEMES Equity and phantom option schemes for the retention of critical employees and key skills by the annual allocation of options which vest in equal tranches in three, four and five years after the grant date. Tiger Brands Black Managers Trust (BMT) for the retention of Black Managers through the Tiger Brands Limited B-BBEE transaction implemented in 2005. Adcock Ingram employees who were employed prior to Adcock Ingram been separately listed on the JSE, form part of the scheme. Vested rights were issued subject to various lock-in periods. Mpho ea Bophelo scheme which is governed according to equality and reparation principles. For more details refer to Annexure B. Eligibility Equity and phantom option schemes: u u Executive management u u Senior management committee u u Other senior employees with critical skills BMT: u u Black Managers of the Tiger Brands Group, which at that time incorporated Adcock Ingram managers Mpho ea Bophelo: u u All permanent black employees in South Africa and those who were naturalised before 1994, who have elected to participate in this scheme Beneficiaries Equity and Phantom option schemes: 52 employees BMT: 145 remaining participants Mpho ea Bophelo: 1 893 employees Remuneration (continued) ADCOCK INGRAM  Integrated Report 2018 52 OUR GOVERNANCE