Sasol Integrated Report 2024 - Book - Page 139
INTRODUCTION
ABOUT SASOL
STRATEGIC OVERVIEW
BUSINESSES
ESG
DATA AND ASSURANCE / ADMINISTRATION
REMUNERATION REPORT
PART II: REMUNERATION COMMITTEE CHAIRMAN’S BACKGROUND STATEMENT
The Committee takes seriously its responsibility to ensure that all
employees are fairly and appropriately rewarded, balancing this
with the need to deliver shareholder value.
Mpho Nkeli
KEY MESSAGES
Alignment of reward outcomes
with Company performance.
Continuously improve the line of sight
with the variable pay plan targets.
We have a Zero Harm policy. The fatality
penalty is now more broadly incorporated into
our short-term incentive plan calculations.
Vertical pay gaps for South Africa will be
disclosed as required.
We value stakeholder inclusivity
and collaborate broadly.
The appointment of the new GEC members
strengthens our executive leadership and our
ability to create value for our stakeholders.
Dear stakeholders
An overview
Every year when deciding rewards for our people,
the Committee reviews the performance of the
Group against various financial and non-financial
targets which align with our key priorities,
Chairman of Remuneration Committee
considering the context within which this was
delivered and those factors that fall both within
and outside management’s control.
The Committee works to ensure that management
delivers on the objectives set by our Board over
the short and long term.
Summarised thematic feedback where some shareholders do not agree with our policy, as well as the
Committee’s responses include:
Thematic feedback
Committee’s responses
Improved alignment between the non-financial
incentive plan targets and the strategic priorities
Management is currently reviewing Sasol’s
strategy in the lead up to the FY25 Capital Markets
Day which will be considered in the FY26 target
setting process.
Disclosure of actual pay gaps
The Committee approved the disclosure of pay
gaps in this report.
The use of an actual free cash flow target as
opposed to the free cash flow/turnover ratio
is preferred
Free cash flow (FCF) is heavily influenced by macro
economic factors outside of management’s
control. By using FCF as a ratio to turnover, to be
improved steadily over the historic ratios, the
impact of macros on these results, is neutralised
and management is incentivised to convert
turnover into cash.
The individual performance factor (IPF) range
of 0%–150% used as a multiplier in the STI
calculation, can result in a pay-out much better
than the group’s final STI result
We have held the view that the IPF range can
result in a much lower or higher score; and as it
has to balance out an average of 100% across a
cohort of employees, it prevents overspending on
the incentive pool which is created under the
group scorecard. However, we will be reviewing
this formula in FY25.
Corporate performance targets used in the
LTI plan to be more stretched and focused on
rewarding improved operational performance
For FY25, we reduced the weighting associated
with the ROIC target, and introduced a net debt
reduction target (through sustainably improved
operational performance).
Engaging with shareholders
At our FY23 AGM in January 2024, support for the
policy reduced to 84,67% compared to 92,92% in
2022. There was also a decline in shareholder
support for the Remuneration Implementation
Report, with 89,42% of votes in support of the
non-binding advisory resolution, compared to
94,89% in 2022.
The outcomes against the two advisory votes
still show that the vast majority of shareholders
believe that our approach to remuneration and
the interests of our shareholders are aligned.
However, as part of our approach to stakeholder
inclusivity, and to obtain greater insights into
reasons for not supporting the policy and the
report, we again engaged with shareholders
representing 40% of Sasol shares. We always
appreciate the candid feedback which is duly
considered by management and the Committee
and helps shape our decisions.
SASOL INTEGRATED REPORT 2024
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