Sasol Integrated Report 2022 - Book - Page 71
INTRODUCTION | ABOUT SASOL
STRATEGIC OVERVIEW
CREATING VALUE
GOVERNANCE AND REWARDS
DELIVERING
ADMINISTRATION
REMUNERATION REPORT (CONTINUED)
Short-term Incentive Plan outcomes
The following table provides the outcomes against the 2022 performance targets that were set for the Group STI plan.
ESG
(People)
KPI – Key
Performance
Indicator
(10%)
Weightings
Process Safety
5%
Occupational
Safety
5%
15%
Threshold
(Rating = 0%)
Target
(Rating = 100%)
Stretch
(Rating = 150%)
Achievement
FERs ≥ 21
FERs = 19
FERs ≤ 17
FERs = 13
HSI Rate ≥ 14
HSI Rate = 12
HSI Rate ≤ 9
17,58
Energy Efficiency Improvement using
30 June 2021 as the basis for assessment
of FY22 = 1%
Energy Efficiency Improvement using
30 June 2021 as the basis for assessment
of FY22 >= 1,5%
1,15%1 Energy Efficiency Improvement
200 MW secured for Energy
PPAs/VPPAs signed to achieve 0.65MtCO2e
by end FY2024
PPAs/VPPAs signed to achieve 0.66MtCO2e
by end FY2024
ESG
(Planet)
Advancing
5%
Group Financials
(Profit)
0%
8,59%
200 MW key terms signed, 0,275MtCO2e
in Energy and 57ktCO2e in Chemicals2
Climate Change
100%
7,5%
Energy Efficiency Improvement using
30 June 2021 as the basis for assessment of
FY22 ≥ 0%
(20%) sustainability:
(70%)
Weighted
Achievement
5,3%
Setting up the new sustainable
Business Venture
Two global PtX partnerships established
and one feasibility study announced
Two feasibility studies completed and
submitted for approval to PtX partner
approval authorities/boards
Full ecoFT governance structure established
and populated (2,5%) Two global Ptx
partnerships established and feasibility
study announced
5%
0%
Sales
volumes
25%
FY22 sales volumes = 17mt
FY22 sales volumes = 18mt
FY22 sales volumes = 19mt
16,7mt
Cash cost
optimisation
20%
FY22 target CFC + R2bn
FY22 CFC = R58,3bn
R2bn below FY22 budget CFC
Cash fixed costs were 0,3% above target3
Working
capital
10%
NWC% = 17%
NWC% = 15%
NWC% = 13%
NWC% = 12,6%4
Sustenance
Capital
15%
Capital expenditure = R28bn
Capital expenditure = R26bn
Capital expenditure = R24bn
R21,8bn5
18,46%
15%
22,5%
Safety Adjustment – Penalty for Fatalities
(18%)6
Final Score
64,35%7
Notes
Long-term Incentive Plan outcomes
The Remuneration Policy allows for the normalisation of performance
outcomes for macro economic factors (Brent crude oil price, ZAR/$ exchange
rate), factors impacting performance outside of management’s control
(eg Eskom outages, extreme weather events, force majeures) and alignment of
baselines or budgets with the impact of divestitures or acquisitions. All other
decisions where Committee discretion is applied, are disclosed:
1. Energy efficiency baseline adjusted for asset divestments and Eskom trips.
2.Threshold achieved (2,5%), Chemicals achieved their target (1%)
and Energy partially achieved their target (1,8%).
3. As per Policy, budget restated with exclusion of costs related to
divestitures (restated budget is R55bn). Committee approved the
normalisation of CFC in respect of R923 million of additional electricity
cost due to rerouting of the gas pipeline to ensure ongoing production
of products to customers and positive impact on EBITDA – neither of which
were incentivised in this group scorecard. After normalisation, Cash Fixed
Cost was 0,3% above budget; total impact of discretion applied: +1,7%.
4.Measured over the period April – June 2022 to exclude the impact of
product prices on inventory. NWC % at period end was 14,6%.
5.For 2023, over-and under-expenditure of capex will be penalised and
accurate forecasting and management of capex will be incentivised.
6.3% per fatality = 18% deduction. The Group reported one of the fatalities
in 2021.
7.64,35% final Group STI score out of 150% maximum achievement.
(2021: 117%)
The following table provides the outcomes against the corporate performance targets (CPTs) which were linked to the 2020 LTI awards, which are due to vest in 2023
in respect of the performance period 1 July 2019 – 30 June 2022.
Measure
Weighting Threshold3
Target3 (100%)
Stretch Target3
(200%)
Weighted
Achievement
2,36% compound growth
achieved4
40,91%
Below threshold of 13,5%
for the first two years.
Achieved ROIC of 24,9% (SA)
in 20223
13,4%
75th percentile of the index
Below threshold of 50th
percentile
0%
75th percentile of the index
Below threshold of 50th
percentile
0%
Increase in tons
produced/headcount
30%
1% Compound improvement
on base
2% Compound improvement
on base
3% Compound improvement
on base
ROIC2 Rest of Sasol
20%
Rest of Sasol ROIC
(excl AUC) at SA WACC
of 13,5% per annum
Rest of Sasol ROIC (excl AUC) at
SA WACC 13,5% + 1% = 14,5%
per annum
Rest of Sasol ROIC (excl AUC) at
SA WACC 13,5% + 2% = 15,5%
per annum
ROIC2 USA
10%
US ROIC (excl AUC)
at US WACC of 8%
per annum
US ROIC (excl AUC)
at US WACC 8% + 0,5%
= 8,5% per annum
US ROIC (excl AUC)
at US WACC 8% + 1%
= 9% per annum
TSR MSCI World
Energy Index
20%
Below the 50th percentile of the
index
60th percentile of the index
TSR MSCI
Chemicals Index
20%
Below the 50th percentile of the
index
60th percentile of the index
Achievement
Achievement
0 – 200% range1 = 54,31%
1. In respect of LTIs issued to members of the Group Executive Committee including the Executive Directors,
100% of the award was subject to the achievement of CPTs. Of the vested portion, 50% will be released in 2023
and the balance in 2025 subject to continued employment.
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2. ROIC was measured annually.
3. Straight line vesting is applied between threshold, target and stretch target.
4. Reduction in headcount over the period, compensated for lower production in 2022.
