Sasol Integrated Report 2022 - Book - Page 65
INTRODUCTION | ABOUT SASOL
STRATEGIC OVERVIEW
CREATING VALUE
DELIVERING
GOVERNANCE AND REWARDS
ADMINISTRATION
REMUNERATION REPORT | CHAIRMAN’S LETTER (CONTINUED)
CHANGES TO THE GROUP EXECUTIVE COMMITTEE
Mr Riaan Rademan, a former Sasol Group executive
who retired in 2017, was appointed as the Executive
Vice President of Mining effective 9 March 2022.
He will assist in stabilising our mining business
and advancing our recovery plans. His appointment
is for a period of 16 months, with an option to extend
the term. Mr Rademan does not participate in the
Group’s LTI plan.
On 30 June 2022, Sasol bid farewell to Chief
Financial Officer (CFO) Mr Paul Victor. We welcomed
Mr Hanré Rossouw who was appointed CFO designate
effective 4 April 2022. Mr Rossouw officially assumed
the role of Executive Director and CFO on 1 July 2022.
We announced the retirement of Mr Bernard
Klingenberg, from August 2022, and the appointment
of Mr Simon Baloyi as the Executive Vice President:
Energy Operations and Technology effective
1 April 2022.
KEY COMMITTEE DECISIONS
Performance against the Group STI targets was
mostly below or on-target, with a total score of
64,35% of the 150% maximum on the Group STI
scorecard. Consistent with previous years, and in line
with our Policy, normalisation for factors outside of
management’s control was applied. The two areas
where minimal discretion was applied are detailed in
the Implementation Report.
IR
R
efer to page 69 for Implementation Report.
The sales volumes target was missed due to
feedstock supply and operational issues. The
Committee was comfortable with Cash Fixed Cost and
Capital expense management and pleased with the
progress made on Sasol ecoFT. For incentive
purposes, an 18% penalty was applied due to the
tragic loss of six of our employees and
the disappointing high-severity injury (HSI) rate in
the year. The business is reporting five fatalities, as
the one HSI happened in 2021. The Board requested
the implementation of a safety remediation plan.
Excluding the President and CEO, members of the
GEC also participated in the Chemicals and/or Energy
BU STI plan. The final approved score for Chemicals
was 108,09% and for Energy was 100,95%.
More detail on the calculations is provided in the
Implementation Report.
The Committee believes that this outcome is a fair
representation of the results which were achieved
across all financial and non-financial metrics in 2022.
For members of the GEC, subject to further service
criteria being met, LTIs issued in 2020 will vest at
54,31%. These were subject to performance targets
over the period 1 July 2019 – 30 June 2022.
The Committee is concerned about the continuous
low level of vestings on the LTI plan but believes
that it is reflective of both the Group’s absolute
performance and performance relative to the market
over the past three years and hence agreed to not
amend the final vesting percentage.
Severe cash cost pressures in recent years meant
that members of management at Sasol had not
received salary increases for a number of years from
2016. In 2022, the Committee requested an extensive
benchmarking exercise and, as a result, awarded
members of the GEC higher-than-inflation increases
in October 2021. We also approved location-specific
inflation-related percentage increases for the
October 2022 salary increase cycle for employees
outside of collective bargaining units, including
members of the GEC.
As previously reported, the vesting of long-term
incentives awarded as part of the annual LTI award
on 4 December 2020 are subject, inter alia, to the
achievement of a set of performance targets.
Among them is the ESG target of implementing
150 MW of renewable energy capacity by 30 June
2023. Subsequent to December 2020, Sasol’s ability
to achieve this target has been affected by
unforeseen delays, including the sale of air
separation units to Air Liquide, the inclusion of
Air Liquide as a partner in our Renewable Energies
programme in Secunda and constrained supply
in South Africa. Considering these factors as well as
the macro impacts on the acquisition of renewable
energy, the final implementation date will only be
known in 2023. The Committee will consider this
matter during 2023 in view of the uncontrollable
events external to the organisation.
Shareholders will be requested to approve the new
LTI plan at the 2022 AGM. The main changes from
the 2016 LTI plan are specifically related to the
introduction of a post-termination shareholding
We are driven to ensure that ESG issues receive the necessary attention and to this end
the incentive targets for 2023 focus on Sasol’s drive to decarbonise.
requirement for members of the GEC, and the
removal of the accelerated vesting regime for all
participants whose services are terminated under
good leaver provisions, thus ensuring awards vest
at their normal vesting date.
Following concerns raised by shareholders, an
extensive review of the structure and quantum
of the non-Executive Directors’ fees was conducted
which included a review of the peer group and a
detailed benchmarking exercise. This led to a
significant reduction in Board fees, and – where
necessary – Committee fees were also reduced to
ensure alignment. The new fee structure received
support from our shareholders at the previous AGM.
INDEPENDENT ADVISORS
Mr David Tuch, Managing Director at Alvarez &
Marsal Taxand UK LLP (A&M) continued to act as
an Independent External Advisor to the Committee
in 2022. A&M provided information on global reward
trends as well as market insights into discussions
on executive reward matters. A&M did not provide
any other services to Sasol and the Committee
was satisfied with the advisor’s independence.
Looking forward 2023
We are driven to ensure that ESG issues receive
the necessary attention at Sasol, and to this end
the incentive targets for 2023 focus on Sasol’s drive
to decarbonise. Incentive plans include a holistic
approach to overall ESG matters balanced with
the requirement to deliver financial returns to our
shareholders. Several partnerships have been
concluded to realise our ESG ambitions. In the year
ahead, our high-severity incident programme will
receive additional leadership focus.
The Group is still intent on sustainably reducing our
levels of debt and as such will continue to focus on
cash fixed cost management and prudent capital
allocation. Free cash flow as a percentage of turnover
will also, for the first time, be introduced into our
Group STI Scorecard as we phase out the Sasol 2.0
specific targets. The Business Unit scorecards that
SASOL INTEGRATED REPORT 2022
64
were introduced in 2022 will again be a feature of
the STI calculation for 2023 to ensure that there is
dedicated focus not only on Group priorities, but also
on the Business Unit priorities in Chemicals, Energy
and Mining. The final STI calculation will be weighted
between the Group and BU STI scorecards, depending
on line of sight and level of accountability.
In closing
The Committee remains dedicated to ensuring that
Sasol’s Remuneration Policy and the implementation
thereof is fair and responsible, enabling the
achievement of the Group’s strategic priorities
including value preservation and creation for our
shareholders, customers, communities and
employees. The Committee is satisfied that the
Policy meets the agreed objectives. It is also satisfied
that the remuneration outcomes for 2022 reflect
alignment between performance and rewards and are
appropriate and fair considering what was achieved
in the year. Ultimately, our success will be reflected in
the Sasol share price which significantly contributes
to the reward outcomes of our executive team.
The Committee appreciates the support of all Sasol
people and their resilience, dedication and generosity
displayed over this past year. I would like to express
appreciation to shareholders for their continued
commitment to engaging with me and look forward
to their endorsement of the advisory votes on our
Remuneration Policy and Implementation Report at
the 2022 AGM. I would also like to extend my
personal thanks to the Committee members for
their support, input and guidance in 2022.
Mpho Nkeli
Chairman of Remuneration Committee
11 August 2022
