Sasol Integrated Report 2024 - Book - Page 141
INTRODUCTION
ABOUT SASOL
STRATEGIC OVERVIEW
BUSINESSES
ESG
REMUNERATION REPORT
DATA AND ASSURANCE / ADMINISTRATION
PART II: REMUNERATION COMMITTEE CHAIRMAN’S BACKGROUND STATEMENT continued
Results
Appreciation
Short-term incentives
Long-term incentives
In FY24 the reward outcomes based on the
Group’s STI plan were in line with Sasol’s overall
performance, with a total score for the GEC of
38,81% of the maximum opportunity of 150% on
the Group STI scorecard.
For LTI participants, subject to service criteria
also being met, LTIs granted in FY22 will vest in
FY25 at 83,64% to the GEC.
Details are disclosed in the Remuneration Implementation
Report.
In line with our policy, outcomes in excess of 100%
in respect of our non-financial targets, were
moderated down to 100% as the financial targets
collectively, were not achieved which reduced the
outcome by 10,21 percentage points.
The Remuneration Policy allows for the CEO to
recommend a modification to the final scores on the
STI scorecard based on a review of the extent to
which a business unit or function has detracted or
contributed to the Group performance. This range is
between 80% and 120%. The Committee approved
the CEO’s recommendation of an 80% modifier.
The same modifier was applied to the GEC STI score.
Following five tragic fatalities in the year, a 15%
penalty was applied to the STI score for the GEC;
additionally, all employees’ STI scores had been
reduced through the application of a penalty of
between 5% and 13% which was dependent on
seniority, and the business unit where they are
employed.
Individual performance was assessed against a
balanced scorecard, in the range of 0-150%,
which is a final multiplier in the STI calculation.
For members of the GEC, the individual
performance factors (IPFs) approved on the basis
of their individual performance agreements were
in the range of 90% and 110%.
The Committee believes that these STI outcomes
which for the GEC, after all modifiers, reduced the
outcome by 38%, are a fair representation of the
results achieved. While significantly below target,
we still wanted to give recognition to our
employees for performance outcomes achieved.
One of the metrics in the FY22 LTI performance
targets was Sasol’s inclusion in the Dow Jones
Sustainability Index (DJSI). Top-ranking businesses
from a range of industries are acknowledged as
leaders in their respective sectors and are listed
in the DJSI based on their total sustainability
performance. The November 2023 DJSI score
was 67, a substantial improvement in our Sasol’s
DJSI ratings compared to prior years and also
saw Sasol being included in the 2024 S & P Global
Sustainability Yearbook. Inclusion in the Yearbook
bears testament to the Company’s commitment
to sustainability, and the transparent
communication of our progress.
MSR
To incentivise performance that is aligned to
shareholders’ interests, Sasol has in-service
Minimum Shareholding Requirements (MSRs)
for Executive Directors and Prescribed Officers,
as well as an 18-month post-termination
MSR for members of the GEC. Good progress
continued to be made in this regard in the year
for GEC members who have been in their
portfolios for a few years. Messrs Kahla,
Griffith and Ms Mokoena met their MSR
targets during the course of the year. Similar
MSR targets were set for the newly appointed
GEC members and will be closely monitored.
Board fees
As approved at the 2023 AGM, fees for nonExecutive Directors (NEDs) were adjusted in line
with US inflation in January 2024.
Independent Advisor
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 FY24. A&M provided information on global
reward trends as well as market insights into
discussions on executive reward matters. The
Committee is satisfied with A&M’s independence.
Looking forward
As the current STI design relates to a lesser
extent to employees from first level supervisor
to more operational roles, the Committee
approved the introduction of a pilot incentive
plan for the four lowest levels in our organisation.
This two-tier approach will be piloted in South
Africa in FY25 and will replace between 40% and
70% of the target incentive that previously would
have been earned under the Group scorecard.
The balance of the target incentive will still be
linked to performance against the targets included
in the Group scorecard.
The design is simple, easier to track and
communicate but will still only be made available
for payment after the end of the financial year.
Under the leadership of a new President and CEO,
Sasol is embarking on a journey to evaluate the
current strategy to be presented at the FY25
Capital Markets Day. The Committee extensively
debated the incentive targets for FY25,
considering that the strategy is under review, but
ensuring a continuous focus on the most
important key priorities of ensuring safe
sustainable operations, managing costs,
delivering free cash flow, reducing the net
US$ debt and continued focus on reducing our
carbon footprint. The STI scorecard has fewer
metrics to ensure the right focus. We want
to ensure that these targets drive focused delivery
against realistic targets set in the context of
our current environment, and contribute to an
attractive employee value proposition enabling
the attracting and retention of the
employees we need to be successful.
For FY25 annual increases effective 1 October 2024,
we have considered the Group’s cash flow
situation and approved annual increases of not
more than 70% of CPI for employees outside of
collective bargaining structures.
SASOL INTEGRATED REPORT 2024
139
The voting outcomes at the latest AGM regarding
remuneration at Sasol indicated that a substantial
majority of our shareholders are satisfied with
the work of the Committee. We do not take this
endorsement for granted and remain committed
to ensuring that Sasol’s Remuneration Policy
and the implementation thereof is fair and
responsible; supports the delivery of the Group’s
strategy; addresses Material Matters; and creates
and preserves value for our stakeholders.
On behalf of the Committee, I thank all Sasol’s
employees for their hard work and commitment
in a volatile macro context. I would like to note
Sasol’s appreciation to shareholders for their
continued constructive engagement and look
forward to their endorsement of the resolutions
on our Remuneration Policy and Remuneration
Implementation Report at the 2024 AGM.
After seven years on the Board at Sasol, I will be
stepping down on 31 August 2024 and will
hand over the chairmanship of this Committee
on 1 September 2024 to Tim Cumming, who
joined the Board as a non-Executive director on
1 June 2024.
I would like to extend my personal thanks to all
members of the Committee, to management,
and to our shareholders, for their support over
the years and wish them well in the period ahead.
I know I leave you in good hands.
Mpho Nkeli
Chairman of Remuneration Committee
19 August 2024
