Adcock Ingram Integrated Report 2018

IMPLEMENTATION REPORT SALARY ANDWAGE INCREASES During the year under review the following average increases were granted to employees: u u 7.5% for bargaining unit employees effective 1 July 2017; and u u 6.0% for non-bargaining unit employees 1 December 2017. u u In accordance with a two-year agreement with the bargaining unit, another 7.5% increase was granted effective 1 July 2018. SHORT-TERM INCENTIVES Sales staff Sales incentives paid or accrued, relating to the current financial year are R33,1 million. Annual performance short-term incentives During the financial year, approximately R32 million was paid to qualifying employees, including management as detailed herein, based upon the levels of achievement against the agreed targets in the previous financial year. SENIOR MANAGEMENT Senior management comprises the executive committee of the Group, excluding the executive directors. As the executive directors’details are disclosed separately, these are excluded from the figures below. During the year there were changes in the composition of senior management. The details show the apportioned annual remuneration of senior management, for the period the incumbents held the position during the year. Remuneration 2018 2017 R’000 R’000 Salary 19 916 20 533 Contributions to defined contribution plan 3 040 3 216 Gross Remuneration 22 956 23 749 Long-term incentives Details of share options in Adcock Ingram granted to senior management are as follows: Offer date Offer price R Balance at the beginning of the year Issued during the year Forfeited during the year Exercised during the year Change in senior management composition Balance at the end of the year Equity 17/06/2014 52.20 486 000 – (99 000) (129 000) 22 000 280 000 03/11/2014 52.20 84 000 – (84 000) – – – 26/08/2015 41.94 564 000 – (159 000) – 36 000 441 000 26/08/2016 42.30 574 000 – (169 000) – 36 000 441 000 24/08/2017 57.73 – 539 000 (84 000) – 36 000 491 000 1 708 000 539 000 (595 000) (129 000) 130 000 1 653 000 A total amount of R31 million was provided in the current year for payment to 51 beneficiaries, including management as detailed herein, in September 2018. The divisions have performed as follows with regards to targets set at the start of the financial year: Trading profit target ROFE target OTC Exceeded Achieved Prescription Exceeded Not achieved Critical care Exceeded Achieved Consumer Not achieved Not achieved Corporate Exceeded Achieved The Distribution Division achieved its service delivery targets, but did not achieve its financial performance target, that is trading profit. Certain members of senior management also received long service awards in the amount of R191 824 during the current year, which are excluded from the table above. Short-term incentives Based on the current year’s performance, senior management qualifies for short-term incentives in the amount of R7 203 333. Full provision has been made for this amount in the current year although payment will only be effected in September 2018. An incentive of R7 460 000 was paid in September 2017, relating to the prior year’s performance, which was fully provided for at 30 June 2017. ADCOCK INGRAM  Integrated Report 2018 53