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BUSINESS MODEL
AND STRATEGIC
OBJECTIVES
LEADERSHIP
GOVERNANCE
SHAREHOLDERS’
INFORMATION AND
ADMINISTRATION
OPERATING
PERFORMANCE
FINANCIAL
PERFORMANCE
BLUE LABEL INTEGRATED ANNUAL REPORT 2014
63
REMUNERATION
REPORT
CONTINUED
In the course of deliberations, the Committee
considers the views of the CEOs on the remuneration
and performance of other Joint Executive Directors
and members of Senior Management.
From time to time independent advice on market
information and remuneration trends is provided to
the Committee by external remuneration consultants.
Blue Label’s human resources department also assists
the Committee by providing supporting information
and documentation relating to matters for the
Committee’s consideration, including assessing
proposed changes to legislation determining
employers’ responsibility to provide retirement
funding for staff.
Additional governance principles applicable to the
composition and principal activities of the Committee
are more fully set out on page 43 (governance
framework) of this integrated annual report.
Policy
The remuneration of Executive Directors and Senior
Management is determined on a total cost-to-
company basis and has three components:
➔
➔
Fixed remuneration – fixed monthly salary and
benefits. Fixed remuneration is reviewed annually
to ensure that the Executives and Senior
Management who contribute to the success of the
Group remain remunerated at appropriate levels in
accordance with the remuneration philosophy.
➔
➔
Variable remuneration – a short-term performance-
related bonus payment. The variable pay element
provided by the short-term bonus plan is intended
to enhance total pay opportunities, should that be
merited by Group and individual performance. The
purpose of the annual performance-related bonus
payment is to reward and motivate the
achievement of Group and subsidiary financial
targets, as well as to motivate strategic and
personal performance. The Joint CEOs may earn an
annual incentive bonus of up to 120% of fixed
remuneration and other Executive Directors of up
to 70%. Senior Management may earn up to 50%
of their annualised salary package.
➔
➔
Forfeitable share plan – a long-term performance-
related incentive scheme. Long-term incentives, in
the form of forfeitable shares awarded under the
share plan, are based on a percentage of total
annualised salary packages and are intended to
reward sustained long-term performance and to
align the interests of the Executive Directors and
Senior Management with those of shareholders.
Fixed remuneration
Blue Label applies discretion in all remuneration
reviews and there is no minimum across-the-board
increase to all employees.
Salary increases for the 2015 financial year ranged
from 0% to 6%. Management of each operating
company was again given the discretion to apply the
appropriate increase within the stipulated range to
each staff member falling under their control.
The annual salary increase of the Executive Directors
for the forthcoming year is 6%.
Details of the directors’ and prescribed officers’
remuneration for the year ended 31 May 2014
appear on pages 200 and 201.
Incentive bonus plan
The Executive Directors and Senior Management
participate in an annual incentive bonus plan, which
is based on the achievement of short-term
performance targets. These targets comprise financial
and non-financial components. The financial
performance component is based on growth in
profits, as measured by headline earnings per share.
The non-financial elements include the achievement
of agreed transformation targets, progress in the
delivery of the Group’s growth strategy, the roll-out
of the Group’s transactional footprint, the level of
progress made in respect of organisational