Sasol Integrated Report 2023 - Book - Page 75
INTRODUCTION
ABOUT SASOL
STRATEGIC OVERVIEW
CREATING VALUE
PERFORMANCE
GOVERNANCE AND REWARDS
ADMINISTRATION
REMUNERATION REPORT CONTINUED
REMUNERATION COMMITTEE CHAIRMAN'S STATEMENT CONTINUED
The year under review
Prioritising our people and reward principles
In line with the Company’s focus on ‘Progressing a Sustainable Future Sasol’, in FY23 the Board devoted much
time and energy to the Group’s overall reward related initiatives and their role in addressing the material
matters identified in the year. This included a review of the EmpVP; updates to Sasol’s wellbeing programmes;
a continued commitment to safety; and the adherence to our clearly defined remuneration principles.
The feedback from our engagement survey, the ‘Heartbeat survey’ was considered by the Safety, Social
and Ethics Committee. All decisions on people related policies and benefits are taken considering the holistic
sustainability strategy of the Company. The Committee also annually reviews the status of all benefit plans
offered in the Group ensuring well-governed plans enhancing the EmpVP.
Key Remuneration Committee decisions
FIXED PAY
In a year in which global inflation remained
persistently high, increases awarded to employees
were higher than in previous years. For employees
outside collective bargaining sectors, the
Committee approved annual salary increases
mostly aligned with market increases. For those
employees covered by collective bargaining
agreements, settlements were reached on salary
increases higher than inflation. Additional budget
was approved to address pay gaps, as well as
adjustments for salaries which are uncompetitive,
compared to similar key skill roles in the market.
SHORT-TERM INCENTIVES
Performance against the Group STI targets
was mostly below target, with a total score of
71,5% of the 150% maximum on the Group STI
scorecard. The Committee applied no discretion
on the final score. Details are provided in the
Implementation Report.
IR
For more detail refer to the Implementation Report on
page 83
Following the tragic fatalities of Mr Kgauta Mhlaba,
a service provider employee, at our Secunda
Polypropylene Bagging Warehouse, and Mr Stiffi
Ndlovu an underground mobile diesel machine
operator at our Thubelisha Colliery in Secunda,
a 6% fatality penalty was applied to the Group STI
score for the GEC.
Excluding the President and CEO and the CFO,
members of the GEC also participated in Business
scorecards. The STI score for Business EVPs, was
calculated on a combination of the Group (60%)
score and the respective Businesses' (40%) score;
the Corporate Centre EVPs’ STI scores was a
weighted average between the Group and the
three Businesses' STI scores. The final approved
score for Chemicals was 71,1%, for Energy 76,3%
and for Mining was 59,7%.
Individual performance is assessed against a
balanced scorecard, in the range of 0% – 150%
which is a multiplier in the STI calculation.
IR
For more detail refer to the calculations provided in the
Implementation Report on page 83
The Committee believes that these STI outcomes
are a fair representation of the results achieved
across all financial and non-financial metrics
in FY23.
LONG-TERM INCENTIVES
For GEC members, subject to performance and
service criteria being met, LTIs granted will vest in
FY24, at 67,34%. The performance period was from
1 July 2020 – 30 June 2023. As previously reported,
among these CPTs was a target of implementing
200MW of renewable energy capacity by
30 November 2023. Despite, by 12 June 2023,
having signed PPAs for nearly 775MW of renewable
projects, Sasol’s ability to deliver on this target is
hampered by a number of factors which included
the inclusion of Air Liquide as a partner in our
Secunda renewable energy programme (post the
sale of the air separation units), severely restricted
grid capacity and being one of the largest RE
procurers in the country, setting the benchmark
for securing these type of transactions.
Although the most recent relaxation of the NERSA
licensing requirement benefitted the programme,
the June 2023 Eskom announcement on the IGCAR
PROGRESSING A SUSTAINABLE FUTURE SASOL
In FY23 the Committee devoted much time and energy to
the Group’s overall reward related initiatives and their role
in addressing the material matters identified in the year.
has led to the Committee deciding to postpone an
assessment of performance against the renewable
energy target, until more clarity is available in this
regard.
The Committee also considered that in light of the
PPAs already signed, should grid access be
available, Sasol should be in a position to exceed its
2025 energy emission reduction targets; however,
there are many moving goal posts in this regard
which hamper progress.
The Committee remains firmly committed to
incentivising progress against our renewable
energy and energy reduction targets; a key
strategic priority.
As part of our role to determine vesting, the
Committee also considered whether a windfall gain
occurred for FY21 awards as a result of awards
having been granted at a share price which was
negatively impacted by the outbreak of the
Covid-19 pandemic.
The Committee noted that Sasol’s share price
experienced significant volatility in the periods
before and after the awards were made in FY21;
however, no awards were made when the share
price dropped below R100 in this period.
Furthermore, the Committee noted that Sasol’s
share price stabilised from 1 June 2020; for the rest
of the year, it averaged R130,60; and all FY21 LTI
grants were made when the share price was close
to or above this level. As a result, supported by
the independent assessment, the Committee is
satisfied that a windfall gain did not occur for any
of the LTI awards granted in FY21.
SASOL INTEGRATED REPORT 2023
74
Following shareholder approval at the 2022 AGM
of the new LTI plan, Sasol took the lead in
the South African market by introducing an
18-month post-termination shareholding
requirement for members of the GEC to ensure
longer-term exposure to the Sasol share price,
even after service termination.
The Committee is pleased with the progress made
towards meeting the minimum shareholding
requirements for members of the GEC.
The Committee also reviewed the portion of the
LTIs which have both performance and continued
employment conditions attached and approved
changes in this regard for FY24, reducing the
percentage allocation related to restricted shares.
BOARD FEES
In 2021, Sasol reduced Board remuneration after an
extensive review of the structure and quantum of
non-Executive Directors‘ (NED) fees. As approved,
the fees were adjusted in line with inflation in
January 2023. An inflationary adjustment to the
Board fees will be proposed for shareholder
approval at the 2023 AGM. This increase follows
a comprehensive review of the NED fees.
EXTENDED NOTICE PERIOD
In the year, the Committee extended the notice
period for new appointees in Group leadership and
leadership role categories from one month to three
months. This was to ensure sufficient time for
a smooth handover of responsibilities as well as
longer lead times to appoint suitable external
candidates.
